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3/31/07 Investment House Alerts Report
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IH Alert Subscribers:
MARKET ALERTS:
Target hit alerts: None issued
Buy alerts: None issued
Trailing stops: HMSY; UCTT
Stop alerts: TMO
SUMMARY:
- Feds undercut a rally attempt, but stocks manage to rebound to flat.
- End of quarter pushed energy, weakened techs. Can the market revert to pre-Wednesday?
- New tariff raises the fear of more to come and retaliation, but it sure sounds like Japan bashing in the 1980's.
- Chicago PMI surges back, spending and income remain strong while oil and gasoline continue their ascent.
- Indices still at a crossroads in the rally and importantly, still in a correction.
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VIDEO NEWSLETTER & TRANSCRIPT
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This weekend we have another installment of the video newsletter. We also have a transcript available for following along, reading on its own, or other use as you may see fit.
To view the Video Market Summary please browse to the following links. There are two this week to accommodate some additional information:
http://investmenthouse.com/ihmedia/3-30 market summary.wmv
TRANSCRIPT:
Hello everyone. I am Jon Johnson and I'm bringing you your weekend of video summary this week.
It could have been a really bad week for the market and we had some issues that confronted stocks that were really beyond the scope of the usual market action. It all hit on Wednesday after we had a nice pullback underway. Fed Chairman Bernanke did not please the market with his comments to Congress regarding inflation. Indeed, he said that inflation was still a problem for the economy and the Fed's main concern moving forward. His testimony was part of the issues that helped bring things lower Wednesday, but the market also gapped lower that day, as other issues in addition to the Fed undermine confidence (isn't that always the case when the Fed is active?). Investors have to deal with the Iran/UK problem where the servicemen are being held hostage, in turn helping push oil steadily higher all week. That started undermining strength in the market subsequent to the rebound and the follow through, turning an orderly test into more sharp, volatile selling.
The market did manage to catch itself. It wasn't just a plunge into oblivion after Bernanke came out and oil prices surged. Stocks finished out the week testing lower, but then rebounded as the sessions went on to close. The market started to sell off after the handle that was forming after the follow-through two Wednesdays back, but the handle is still holding up. All the indices are not equal right now, however, as the S&P 500 and the S&P 600 are still in decent shape, the small caps in excellent shape. NASDAQ and SOX, well, they're trying to abdicate their leadership once more. They were trying to take the lead as this last rally started.
We have seen that before; we saw it back in 2006 when that rally started. NASDAQ shot out front, but could not sustain the lead and left it up to energy, metals and materials on the S&P 500 and the S&P 600 to lead the market while the techs were happy to tag along. They tried again at the start of 2007, but abdicated that lead after just a week. Now after jumping out in front in the rally off the lows with chips surging and NASDAQ providing the follow through, they are fading once more. The irony is NASDAQ provided that follow through session two weeks back and is now the index that is in more trouble than SP500 or SP600.
NASDAQ is one of the weaker indices right now. It hasn't tanked as we said, but it is not leading right now and a lot of that is due to the Philadelphia semiconductor Index. They tried to make a break higher but then fell back to the bottom quarter of their range on the week. Not the picture of strength.
Friday we expect a little bit of volatility to in end the quarter. Stocks started off pretty good after Thursday, posting nice early gains. Then we got another sock when the government stepped in. The market did not like this. The Bush administration okayed a tariff on certain paper products from China. Of course the market did not like this and it solid back. The reason it sold is it fueled one of the big fears: some in the Senate and in the House who want to slap a more aggressive tariffs on China and may see this as clearing the way for more. In other words, was this just a first step. We think it was likely just a bone thrown out to Congress trying to placate every one about the trade imbalance. More on this later. It definitely hurt the market Friday, pushing it negative. Stocks recovered, but they were never the same after that announcement.
One thing we do know about the week: the market had plenty of chances to sell off. There was some distribution, and that was a problem right after a follow through. Distribution can wreck an attempted rally if it occurs early in the rebound attempt. Even with that those issues, the indices were able to hold and rebound intraday off support levels.
Now one of the questions we have to ask ourselves is, with the selling that brought them down and with the bouncing back up off the lows, how much is this was just quarter end shuffling. That is a big factor that goes on every quarter. There is window dressing where the big funds want to move into stocks that have performed well so they can show up in the prospectus. Well, what happened as we saw was that energy stocks that have been performing well really performed nicely from Wednesday on. We saw tech stocks that have been laggards and semiconductors which some of them, well the majority of them, have been laggards. They sold off. Well that fits the bill for window dressing as you get your portfolio all spiffed up and beautified by including the stocks that really move well, e.g. energy and metals. There are still a lot of stocks showing very good technical patterns and they were swapping in and out of those.
Now the key this week coming is whether or not the stocks and the indices can pop back out after this artificial shuffling at the end of the quarter or whether they are going to continue on down. That's the key. We are at a crossroads as we said on Thursday night. The market is going to have to make a determination and either continue that rally and go on a test the old channels or the old high and then most likely come back down and test again, or whether it's just a short circuit the whole process and just come on down now and test the prior low. Frankly it would be better for the market if it went on up here and spend another week or two or three moving back up towards those highs. That would allow a broader base which would be better because the market will likely not extend a five-week double bottom into a seven or eight month rally, particularly when you're coming up this time of the year. We are getting into the spring time and then after that we have summer where volume drops, people go on vacation, etc. These are always problems we have to deal with. Plus the oil problem in the summer drive gasoline prices are already higher. We are going to have some issues with those down the road, so it would be best for the market going up now to test the old highs and then come back down and make the test and stretch this basing process out for a broader foundation for a better move ahead of when the economy actually starts to pick up the times.
Now a lot of people, just as I just said, say that summertime is not a good time. Well, there are years that have good summer runs and years that don't. You do have years where you have very good end of summer rally ahead of a fall low or bottom. This is the year preceding an election year, and that is historically a good year according to the market almanac, and that could hold out. But we have to remember that the market can go up and down many times during the year before ending up higher at the end. It is the in between ups and downs that drive people insane, and a lot of that often happens in the summer months.
THE ECONOMY
Well, you can't ever talk much about the market today without talking about the economy. That makes obvious sense as the economy ultimately sets the market's direction. Friday we had more data, and indeed a bid data week.
But Friday was very interesting. The worry or fear that has been swirling for several weeks is that the economy is really weaker than anyone expects. That is somewhat of a misnomer because everyone expected the economy to weaken, they saw week in 2006 in the second half and they new it would be weaker to start this year. But there is an old saying that reality bites or slaps you in the face. And when it actually occurs it always seems worse even though you anticipated it. That is where we are now.
The Chicago PMI surged back up after two months below 50, i.e. two months in contraction. It jumped back up to 61.7, one highest readings as shown in a year. New orders rose over 72, and they rose from a negative or contraction level at 49. Production jumped as well it was right at 51 and jumped to 65. Very strong numbers left a lot of people scratching their heads.
Personal spending and income were strong as well. Income and spending rose 0.6%, doubling expectations of 0.3%. In January incomes rose 1%, but much of that was du to some mega-Wall Street bonuses that skewed the data. From the spending side it was all services with a 1% gain while the other areas were flat to lower. So, even within the reports, there's a mixed picture that we are seeing with the date in the market: some great reports here, some not so great reports there, and some crappy reports over there. And that's all part of what happens however, when we go through an economic mid-cycle slowdown.
Every one wants to say that the world is coming to an end right now, at least in terms of the US economy, and that is easy to do when you have a housing slump that can be a problem. When you have oil prices spike in particular and gasoline wholesale prices already at $2.14. That's higher than post Katrina levels. And that means we are going to have even higher gasoline in addition to the seemingly higher oil ever week. Well that's one of the problems facing us and that could be one of the disruptive factors facing us down the road, but the actual data is typical mid-cycle slow down data. Earlier in the week we referred to the 1994 - 995 series of time when the economy slowed. The Fed was raising rates and the economy slowed as it came out of the recession. We even saw some people on the talk shows this week saying that 1994 and 1995 was a great period for the economy. Well after that early surge the economy sagged as the Fed raised rates; it slowed down but then burst ahead once more when the Fed let off and, of course, Clinton cut capital gains tax rates. That obviously helped versus now with Congress suggesting it will raise the cap gains tax.
There are some of the same features at this point, however, and so it is easy to buy into the hype but as always you need to step back and take a look at the bigger picture. Now there are definite issues that are on the road and we talked about those on Wednesday and Thursday night. Number one, this trade protectionism is a problem if members of Congress take it a green light to go in and slap down whatever of tariff they want.
The question we have does anyone really think that the Chinese did not know this was coming? Treasury Secretary Paulson who is really well known in China and is very well-versed in China, just spent quite a bit of time visiting various governments around the world including China. Do you think Paulson did not tell China that we've had this complaint filed regarding these paper subsidies and we are going to implement this tariff, but it is more window dressing (gee where have we heard that before?) versus substance. It's basically to head off more troubles down the road with the US Congress wanting to do push more tariffs.
We will to see how this plays out, but remember back in the mid-1980s, when everyone was saying Japan was going to own all of our buildings and buy all of our real estate and lease it back to us, and members of Congress were smashing Japanese TVs on the steps of Congress with sledgehammers. Very dramatic, very political, very popular at the time. Everyone thought 'oh my gosh Japan will stop funding our trade deficit." Remember at the time we had big deficits because we were coming out of recession and had cut taxes and raised military spending to push the USSR into financial ruin, and Japan, but we could not lay off the Japanese goods. And everyone thought Japan would no longer fund our trade deficit and that the dollar was going to plunge and create basically a terrible situation for us all. Well the dollar did go lower, but that was because of misguided policies of James Baker and his henchmen. The skinny is that Japan didn't stop buying our treasuries. We worked out our issues with them.
That's what we think will happen in this situation. We protest, we slap on the tariff, China says it is going to start diversifying into other currencies (they said were going to do it anyway over a year ago), and then we work it out and get back to business as usual. Perhaps you recall the French bashing during the lead in to the Iraq war when we were at the UN trying to get approval for sanctions. Colin Powell described our relationship as like old married couple: we would fight a lot but in the end were still good friends. Now China is not France and it is one of our main world competitors and still has global aspirations. They are doing some things that are uncomfortable and unsettling such as the launch and test of a satellite destroyer. China knows, however, that it needs us for now just as much as we need it to buy our treasuries. One of the things though that's not unsettling is that China is a big trading partner with us and it is willing to hold a lot of treasuries and dollars. We don't view a trade deficit and the trade gap as bad for us as some do. This small tariff is one way to forestall further issues that could be a problem down the road. And thus we very much believe this was a bit of an orchestrated move as a way to head off some unpleasant confrontations ahead. Remember, China does not like public squabbles. Paulson knows this and thus this was likely all pre-planned.
There are more serious issues. Oil is a problem. The tariff situation could still get out of hand. If we eliminate the capital gains tax cuts and investment tax incentives we are going to have a real in the financial markets. Don't believe that is not being discussed right now in Congress. There are many senators and congressmen who want to get rid of the capital gains tax cuts and that would be very damaging for the financial markets. The handwriting is on the wall when they have all of these new programs in the budget that require more money to fund but there are supposedly no new tax increases. That is what we were talking about earlier in the week: when do you call a tax increase not a tax increase? When you raise taxes on one group, lower taxes on another group, and say hey there's no net difference here so there is no tax increase.
Of course there is a big difference: if you take money away from those that take the risks, create the businesses that create the jobs for those you are trying to protect, you end up losing jobs overall. You often end up not having the jobs it lower end of the social economic scale because that money is funneled elsewhere because the reward for taking the risk is not there. Harsh reality that makes economics a political game but it is not a game at all. That is how it works, however, and we have lived with it for over 200 years and hopefully will do so for more than another 200.
THIS WEEK
The market was pushed around by bad news. It had every chance to sell. It could have folded up the tent but it did not. Now NASDAQ, SOX, and DJ30 are not looking all that great, but they are collapsing. The small caps and S&P 500 look pretty darn good. If the financials could get on the stick S&P 500 would look super.
We are still in a correction. We have had a follow through. We've had a double bottom and a follow-through to that break out breakout off of that, but were are still in a correction. I'm not going to try and kid myself and think that a 5 week double bottom is going to consolidate a seven-month rally. And then sustain another five or six month rally down the road. If it does and we continue higher we are probably setting up for pretty nasty fall in the summer. It would be better to get it over right now, to go on up to those next highs and then fall back down and complete the base.
The problem is the market doesn't really know what it wants to do at this point is at a crossroads as we said on Thursday night. It has come back to test the break higher. It is still holding the hump in the middle of the double bottom, the little W in if you look at the charts you'll see that indices came back intraday this week at the end of the week and tapped at that hump and they rebounded. There's still a bid under the market at that point, as we alluded to earlier though, was the bid artificial due to the end of quarter adjustment. The market hasn't tipped its hand yet; it has a follow-through but it also has some distribution.
There are still stocks that are still many great stocks that are still in great position to move up. You have energy stocks in a test that can come back and test and then to take off again. Indeed, if they come back this week after the portfolio shuffling at end of the quarter pushed them higher, they will give some great buying opportunities after they test near support and take off again. Same with metals and other stocks that are leading. Our report is full of these stocks as well. We are just waiting to see which ones are going to break higher and we put our money in those.
The problem is we are at that crossroads. We know we are in a correction and we know that we are probably going to go back down and down sharply at some point. We just have to be ready to play both ways, and that means we have to be ready to play some downside plays to pick up some money. The money is there, and we like to take what the market is giving. If it is going to go on and correct, we want to have a handful of downside plays to take advantage of that when it happens. And we are going to keep those on the report and we are going to put new ones on if we see some that are better we are going to put them on to replace the other ones. But we want to be ready because we can make some really fast money (hate to borrow that phrase from the other show) as they fall. Now, what we have to do though on the other hand, is be ready for continued upside. As we said, we are seeing a lot of great stocks holding up well right now. And some of them may be a lot of them are going to hold up even if we get another test, they are going to come back and test support, but they may not collapse. In a correction as opposed to a longer term sell off, really good stocks will test and form bases, but they wont collapse. Those are going to be the ones that come back and lead again when the correction is over.
What we need to do with our positions to the upside is if we have more of a down leg we need to button up those marginal ones, those ones we just entered that haven't build in a lot of gain yet and are just at the point where if they could break hire but for a bad market, in which case they'll probably come back and test. Well, we don't really want ride them to see how far they go down so we will have to be pretty diligent with those, and if we see the indices break below these recent lows they were hitting this week we are pretty sure we are going to have the downside test coming. And that is when we button up our positions that we have, we decide whether or not we want to keep the ones that have good gain built up in them, and if they have options we probably want to go ahead and take any gain off the table or otherwise close them out. We have already taken some gain off the table the past couple of weeks but we would take more. Then what we do is let the other stocks, as long as they hold up near support, the ones we decide we want to hold, let them test, and then as long as they hang on great; when they start back up we buy into them more.
We have to play the market for what it's going to give us. We are pretty sure it's going to give us a test either this week if this shuffling collapses into a sell off, or we could very well get a resumed move higher to test the uptrend channel. There are many good stocks as we said that are showing excellent action and they set the foundation - after all the market is made up of stocks--for the market to move higher. We still see many many that are in very good shape. So we approach this as a kind of bifurcated process but it is really an overall process that meshes together. We are going to protect ourselves if it starts to sell. You may want to get out of select stocks or you may want to get out of all of the upsides. Sometimes that is not a bad call. If you think about it, if we have another move back up to the top from here, and it starts to correct, it might be a very good time just to sell out of your upside positions, see how far they fall, and then move back into them when the correction finds the bottom, comes back up, and then gives the follow through. That is when you him in the correction find them comes back to you as a follow-through and then breaks higher. That will be our signal to move back heavy. It will be a much better, much clearer signal because we'll have more time to put into the base. That is really all we are talking about here. It is an issue of time: how much time do we have to put in going to through this correction before the market is ready for a sustained run.
Right now people are getting complacent again with this rally rally coming back. It didn't break down this week when it had a chance. That has emboldened some people as we saw with the bulls and bears reading; they feel better ("hey, you know, we could actually go on up from here again"). We are probably not going to play out that scenario, so we will see this sentiment get better and then will have another fall that gets pretty bad, and as we said if it does go back up that is a good time to close out positions and see what happens on the downside.
So we approach this week just coming into it recognizing the market can go either way at this point. We still see a lot of great leadership that suggests it is going to try to move back up. Remember, we had energy and metals and materials that led to 2006 move and they led when not much else wanted to lead along with them. Indeed they were leading before the correction of 2006. They are coming back around in good shape and we are going to be able to continue playing those to the upside and we will continue to focus on them. We want to look for good positions and good entry points and then take it when the market is giving it. If we see the moves we need to take them, but if we see the market break below those lows set this week the likely path is back down. Pick the stocks you like, pick the ones that fit your investing style, have a handful of the downside plays ready to go (some index plays are always good and we love individual stocks that are just begging to go lower), and then when the market starts to move and take action accordingly.
We hope you have a great weekend and we hope that you can enjoy some pretty spring weather and avoid some of those horrific storms are going around. Our prayers go out anyone who was in that. Lets keep focused on the big picture here. Don't get sidetracked by the microscopic views of the economy or the small rally ongoing. We are still in a correction, and we just need to keep that in mind when we make our plays. If we do that it helps us keep our feet on the ground and we know how to act when things turn the other way. Have a great weekend will see on Monday and will go knock them dead. I am Jon Johnson. Take care.
THE MARKET
MARKET SENTIMENT
VIX: 14.64; -0.5. Bounced up off 12 this week as the market started to sell more aggressively when the pullback started to undercut support. Still well off the 21 hit three weeks back, and still needs to get over 30 on any further selling to really come into line with the other sentiment indicators.
VXN: 18.24; -0.29
VXO: 14.41; -0.35
Put/Call Ratio (CBOE): 1.2; +0.03. Three sessions over 1.0 to end the week. It took about 4 days off and then returned to 1.0+ closings. The other sentiment indicators are not exactly in line with it at this juncture.
Bulls versus Bears:
Bulls: 48.4%. Bullish sentiment sparked up from 46.6% and 45.5% before that. Still off the 50.5% and 53.3% two months back, but now bulls are getting too high once more on this little bounce and that harkens another downside move in the correction. Bulls bottomed last summer it was near 36%. That is the lowest level since September 2006. Still a ways to go, but when it cracks it can tumble quickly. A 4.3 point drop is pretty salty.
Bears: 27.5%, down from 28.4% and 28.9% the week before. This bounce in the correction heartened investors, but there is likely going to be more rise again in the bears before this is over. Still holding much of the strong jump higher from 26.9% and 24.2% last month. Not bad after spending the first two months of 2007 near 20%. The angst is still strong, and as with bulls, it is not all that far from levels that sparked prior rallies. It hit a post-2002 high in that late June 2006 move (hit near 36%), eclipsing the March 2006 high (33%) and well above the 2005 highs that spawned new rallies (30% in May 2005, 29.2% in October 2005). It is not far from those 2005 levels.
NASDAQ
Stats: +3.76 points (+0.16%) to close at 2421.64
Volume: 2.128B (+5.41%). Volume sparked up starting Wednesday, no doubt part of the quarter end shuffling. That trade also saw NASDAQ gap lower Wednesday and then struggle just below the 18 day EMA. Some distribution, but it came back from the lows Thursday and Friday, indicating some buying came in at support. All in all volume on selling was not a great development for the week but it did not prove fatal just yet.
Up Volume: 1.187B (+334M)
Down Volume: 898M (-199M)
A/D and Hi/Lo: Advancers led 1.31 to 1. Breadth spent a lot of time in the -2:1 range last week, but as the week ended it bounced back to flat as NASDAQ tried to hold the line. Nothing got out of hand on the week from a breadth perspective.
Previous Session: Advancers led 1.03 to 1
New Highs: 113 (+24)
New Lows: 64 (-8)
NASDAQ CHART: http://www.investmenthouse.com/ihmedia/NASDAQ.jpeg
Once more NASDAQ sold off intraday and for the second session it found support at 2400 where it bottomed in late November and late December, and is also the peak of the 'hump' in the short double bottom base to start March. That put a bit better finish on a week that saw the techs gap lower Wednesday on rising volume, showing some distribution. As noted, a day of distribution can stifle a new rally attempt even one with a follow through. NASDAQ is now struggling below the 50 day EMA (2427), but it is finding some purchase at the 'hump.' The interesting aspect of this is that NASDAQ provided the follow through session for the market and after a short attempt at leading it along with SOX are stumbling the hardest. They have not broken down, but this is a familiar refrain from the techs as they tried to lead out of the 2006 correction but faded, and then tried to lead to start 2007 but faded. That shows, however, that the market can still make headway even if techs just decide just to tag along.
The path of least resistance for NASDAQ is downside right now, but as noted above, there was quarter end window dressing taking place and thus NASDAQ stocks were under pressure in favor of the likes of energy and steel. This week will likely see that quarter end pressure dissipate and allow NASDAQ to come up for air. After all of the issues to end the week, it is still holding over the hump and that still keeps it in the handle of its base.
SOX (+0.19%) was the dog of the week. After a solid break higher two Wednesdays back the chips broke this week, gapping lower on Wednesday and then really tanking on Thursday, back down to some support at 460ish where it bounced in February and early March. That took it to the bottom of the second quarter of the range (450 to 490). This is interesting. We are looking at this as a potential roller, i.e. rebounding up into the range once more to either 480 or even 485. That is not a bad play with some SOX options. SMH is very similar as it tested near 33, the bottom of its similar range. It can easily truck back up to 35 (the top of its range is 35.80).
SP500/NYSE
Stats: -1.67 points (-0.12%) to close at 1420.86
NYSE Volume: 1.58B (+4.74%). Volume was the strongest of the week as SP500 undercut the 50 day EMA again but then recovered 10 points off the low to hold support. SP600 went about its merry way, never threatening a breakdown. The test and recover on strong volume shows buyers at those lower levels, and that is a positive despite the whiff of distribution Wednesday.
Up Volume: 711.601M (-225.513M)
Down Volume: 834.694M (+288.184M)
A/D and Hi/Lo: Advancers led 1.25 to 1. Much of the week NYSE kept some decent breadth due to the rise in energy stocks and the relative strength shown in the mid and small caps as a result. While NASDAQ showed some issues, NYSE was relatively clean on the week.
Previous Session: Advancers led 1.69 to 1
New Highs: 150 (+2)
New Lows: 17 (-8)
SP500 CHART: http://investmenthouse.com/ihmedia/SP500.jpeg
The lateral move from the prior week was chop blocked on Wednesday after weakening on Tuesday. Volume was up Wednesday and that raised some distribution issues. Volume remained a bit higher Thursday as it recovered some ground and then Friday as the large caps sold off but then staged an impressive recovery. That kept the large caps above near support at the 90 day MA and 50 day EMA. Note on the chart how the Friday low took SP500 down to the early March 'hump' in the short double bottom, and that jumped it right back up. There is some pop left in the large caps despite financials lagging all week.
SP600 (-0.03%) finished down for the session, but showed a very nice, tight doji that tapped the 18 day EMA on the intraday low for the third straight session. For the third straight session it rebounded to close, maintaining an excellent handle to its short double bottom. Energy stocks no doubt helping it, and that suggests we keep looking their way as well . . . once they show early this week that they were not just bolstered by the quarter end window dressing. Indeed, even if they do pull back some to start the week that is very good given the run they have had as that will give them a rest and set up the next move higher.
DJ30
The blue chips showed a wide ranging but tight doji Friday very similar to SP600. It too tapped the same support intraday (12,250) it hit starting Wednesday, and then rebounded on rising trade. That keeps it in the handle, though as with NASDAQ, it is below resistance of the 50 day EMA (12,380) and the 90 day MA (12,422), tapping the latter on the Friday intraday high before fading back to close. This chart is in the NASDAQ category, i.e. a second stringer in the attempt to continue the rebound rally. As such it is going to need SP500 and SP600 do some front running for it if it is going to keep this rebound move alive.
Stats: +5.6 points (+0.05%) to close at 12354.35
Volume: 233M shares Friday versus 208M shares Thursday. Best volume of the week as the blue chips rallied back from another tap at 12,250 following the tariff announcement. That helped offset somewhat the distribution from Wednesday.
DJ30 CHART: http://www.investmenthouse.com/ihmedia/DJ30.jpeg
Support and Resistance
NASDAQ: Closed at 2421.64
Resistance:
The 50 day EMA at 2427
The July/August trendline at 2465
2468.42 is the November 2006 high
2471 is the December 2006 high
2509 is the January 2007 high
2513 is the December/January up trendline
2523 is price resistance November 2000
2531 is the February high (post-2002 high)
Support:
2405 is the 'hump' high
2400ish from the late November and late December 2006 lows.
2379 is the October high.
2376 is the April high, the former post-2002 high.
2368 is the early October handle high.
2340 is the March low
2339 - 2334
2333 is the top of the Q1 2006 trading range (the January and mid-March 2006 highs)
2316 from interim tops in January and March 2006 trading range
S&P 500: Closed at 1420.86
Resistance:
1425 is an interim high from November 1999
The 50 day SMA at 1425
1432 is the December 2006 high
1439 is the March high
1440 is the mid-January high
1444 from February 2000
1461.57 is the February 2007 high.
1462 is the late November to February up trendline
1475 from peaks in December 1999 and January 2000
Support:
The 50 day EMA at 1418
1410 is the 'hump' high
1408 is the November high
1389 is the October peak.
1374 is the early March low
1371 to 1373 is the December 2000 peak and the January 2001 peak
1369 from early October 2006
1358 to 1362 mark a series of peaks from April 1999 to August 1999 high and the February
Dow: Closed at 12,354.35
Resistance:
12,361 is the November 2006 high
The 50 day EMA at 12,381
The 90 day MA at 12,422
The 50 day SMA at 12,455
12,499 is the December intraday high.
12,796 is the February 2007 and all-time high
Support:
12,350 is the March 'hump' high
12,039 is the early March low.
October high is 12,167
11,986 is price support from mid-October and the early November low.
11,940 is the March low
11,865 from the early October consolidation
Economic Calendar
These are consensus expectations. Our expectations will vary and are discussed in the 'Economy' section.
April 2
ISM Index, March (10:00): 51.0 expected, 52.3 prior
April 4
Factory orders, February (10:00): 2.0% expected, -5.6% prior
ISM Services, march (10:00): 54.7 expected, 54.3 prior
Crude oil inventories (10:30): -846K prior
April 5
Initial jobless claims (8:30): 308K prior
April 6
Non-farm payrolls, March (8:30): 120K expected, 97K prior
Unemployment rate, March (8:30): 4.6% expected, 4.5% prior
Average hourly earnings (8:30): 0.3% expected, 0.4% prior
Average workweek (8:30): 33.8 expected, 33.7 prior
Wholesale inventories, February (10:00): 0.4% expected, 0.7% prior
Consumer credit, February (3:00): $5.0B expected, $6.4B prior
End part 1 of 3
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