After Midnight
Toni Hansen is a Market Analyst and Trader with http://www.tonihansen.com.
February 3, 2012
Market Struggles Between Support and Resistance Zones Intraday
Thursday was not a particularly exciting day for the market. Volume was on the light side and the session was caught between the larger intraday time frame support and resistance levels I discussed in yesterday's column. The day kicked off after a pullback in premarket trade landed the indices at support from premarket congestion Wednesday morning (as shown on the 15 minute charts). This support zone held well and continued to do so even when the indices retested the level mid-day on Thursday.
Prior to that, however, the market attempted a recovery. After hitting lows around 7:45 a.m. ET, the indices continued higher past the 10:00 a.m. ET economic data and into the 11:00 a.m. ET correction period. The Nasdaq ($COMPX) once again served as the relative strength leader, but the pace of the strength began to diminish as the morning wore on.
The shifting momentum offered the bears a chance to take the lead and a short triggered intraday as the S&P 500 ($SPX) and Dow Jones Ind. Average ($DJI) tested the highs from early premarket trade. This slowdown in momentum also allowed the bears to develop a stronger reactionary move to the short trigger and the pace of the selling quickly returned the market to the premarket lows by early afternoon.
After striking lows for a second time on Thursday, the market faced a more difficult recovery challenge. A "V"-type of low and an inverted "V" high left the market in a range into the closing bell, but it increased the odds for a slowdown into the afternoon. Even though the market trended higher throughout the remainder of the regular trading session, the indices experienced a great deal of price overlap from one bar to the next on the five and fifteen minute time frames. This leaves the futures facing another challenge from the bears as we roll over into Friday's trade.
In and of itself, this is still not enough to confirm the start of a larger daily pullback, but the market is due for one. That makes this a good time to look for stocks with relative weakness or upside exhaustion for swingtrades on the short side. For example, O Reilly Automotive (ORLY) has been added to my list because it is showing slowing momentum on the weekly time frame and relative weakness over the past several weeks in addition to upside trend exhaustion. In the meantime, earnings reactions will continue to be a source for action heading into next week and will offer opportunities that will not rely as heavily on overall market direction as other index components.
The major event for the day on Friday will be January's employment data. Nonfarm payrolls are expected to have increased by 150,000 in January, while the unemployment rate is expected to remain unchanged at 8.5.
Index Wrap-up
The Dow Jones Industrial Average ($DJI) ended the day on Thursday with a loss of 11.05 points, or 0.09%, and closed at 12,705.41. Eleven of the Dow's thirty index components posted a gain. The top performers were Alcoa (AA) (+2.16%), Bank of America (BAC) (+1.22%), and American Express (AXP) (+1.07%). The top shares posting a loss were Disney (DIS) (-1.07%), Pfizer (PFE) (-0.94%), and Hewlett-Packard (HPQ) (-0.90%).
The S&P 500 ($SPX) finished the session with a gain of 1.45 points, or 0.11%, and closed at 1,325.54. Out of the index's ten industry groups, the strongest were energy (+0.5%) and financials (+0.5%). The top declining sectors were materials (-0.5%) and health care (-0.4%). The top individual percentage performers in the index were Gap Inc. (GPS) (+10.64%), CMR Group (CME) (+8.36%), and Big Lots (BIG) (+8.27%). The top decliner was Abercrombie & Fitch Co. (ANF) (-13.73%), which lowered its earnings forecast. Ameriprise Financial (AMP) (-8.03%), and JDS Uniphase (JDSU) (-7.16%) were also among the day's top decliners.
The Nasdaq Composite ($COMPX) ended the session higher by 11.41 points, or 0.4%, on Thursday and it closed at 2,859.68. The strongest performer in the Nasdaq-100 ($NDX) was Green Mountain Coffee Roasters (GMCR). GMCR shares jumped 23.85% after it posted earnings of 60 cents a share (18 cents higher than the previous year) and revenue growth of 102%, beating the Street estimates. GMCR saw its share prices plummet from over $115 a share in September to under $35 by November last year. Other top performers included BMC Software (BMC) (+6.66%) and Electronic Arts (EA) (+6.13%). The weakest were Warner Chilcott (WCRX) (-2.78%) and CTrip (CTRP) (-2.57%). Both companies will continue to feel bearish pressure in the week ahead.
Key Domestic Economic Data This Week:
Jan 30 8:30 AM Personal Income Dec Jan 30 8:30 AM Personal Spending Dec Jan 30 8:30 AM PCE Prices - Core Dec Jan 31 8:30 AM Employment Cost Index Q4 Jan 31 9:00 AM Case-Shiller 20-city Index Nov Jan 31 9:45 AM Chicago PMI Jan Jan 31 10:00 AM Consumer Confidence Jan
Feb 1
7:00 AM MBA Mortgage Index 01/28
8:15 AM ADP Employment Change Jan
10:00 AM ISM Index Jan
10:00 AM Construction Spending Dec
10:30 AM Crude Inventories 01/28
2:00 PM Auto Sales Jan
2:00 PM Truck Sales Jan
Feb 2
7:30 AM Challenger Job Cuts Jan
8:30 AM Initial Claims 01/28
8:30 AM Continuing Claims 01/21
8:30 AM Productivity-Prel Q4
8:30 AM Unit Labor Costs Q4
Feb 3
8:30 AM Nonfarm Payrolls Jan
8:30 AM Nonfarm Private Payrolls Jan
8:30 AM Unemployment Rate Jan
8:30 AM Hourly Earnings Jan
8:30 AM Average Workweek Jan
10:00 AM Factory Orders Dec
10:00 AM ISM Services Jan
Key Foreign Economic Data This Week:
Jan 30 05:00 EUR Euro-Zone Business Climate Indicator (JAN) Jan 30 05:00 EUR Euro-Zone Consumer Confidence (JAN F) Jan 30 08:30 USD Personal Income (DEC) Jan 30 08:30 USD Personal Spending (DEC) Jan 30 08:30 USD Personal Consumption Expenditure Core (DEC)*** Jan 30 18:15 JPY Nomura/JMMA Manufacturing Purchasing Manager Index (JAN) Jan 30 18:30 JPY Household Spending (DEC) Jan 30 18:30 JPY Jobless Rate (DEC) Jan 30 18:50 JPY Industrial Production (DEC P) Jan 30 19:01 GBP GfK Consumer Confidence Survey (JAN) Jan 30 19:30 AUD NAB Business Confidence (DEC) Jan 30 19:30 AUD Private Sector Credit (DEC) Jan 31 EUR German Consumer Price Index (JAN P)*** Jan 31 00:00 JPY Annualized Housing Starts (DEC) Jan 31 00:00 JPY Housing Starts (DEC) Jan 31 EUR German Retail Sales (DEC) Jan 31 02:00 CHF UBS Consumption Indicator (DEC) Jan 31 03:55 EUR German Unemployment Change (JAN)*** Jan 31 03:55 EUR German Unemployment Rate s.a. (JAN) Jan 31 04:30 GBP Net Consumer Credit (DEC) Jan 31 04:30 GBP Net Lending Sec. on Dwellings (DEC) Jan 31 04:30 GBP Mortgage Approvals (DEC) Jan 31 05:00 EUR Euro-Zone Unemployment Rate (DEC) Jan 31 08:30 CAD Gross Domestic Product (NOV)*** Jan 31 10:00 USD Consumer Confidence (JAN) Jan 31 17:30 AUD AiG Performance of Manufacturing Index (JAN) Jan 31 19:00 AUD HIA New Home Sales (DEC) Jan 31 19:30 AUD House Price Index (4Q) Jan 31 20:00 CNY PMI Manufacturing (JAN)*** Jan 31 20:30 JPY Labor Cash Earnings (DEC)
Feb 01
02:00 GBP Nationwide House Prices n.s.a. (JAN)
03:15 CHF Retail Sales (Real) (DEC)
03:30 CHF SVME-Purchasing Managers Index (JAN)
03:55 EUR German Purchasing Manager Index Manufacturing (JAN F)
04:00 EUR Euro-Zone Purchasing Manager Index Manufacturing (JAN F)
04:30 GBP Purchasing Manager Index Manufacturing (JAN)
05:00 EUR Euro-Zone Consumer Price Index Estimate (JAN)
08:15 USD ADP Employment Change (JAN)
10:00 USD Construction Spending (DEC)
10:00 USD ISM Manufacturing (JAN)***
10:00 USD ISM Prices Paid (JAN)
19:30 AUD Trade Balance (DEC)
Feb 02
02:00 CHF Trade Balance (DEC)
04:30 GBP Purchasing Manager Index Construction (JAN)
05:00 EUR Euro-Zone Producer Price Index (DEC)***
10:00 USD Fed's Bernanke Testifies Before House Budget Committee***
17:30 AUD AiG Performance of Service Index (JAN)
20:00 CNY China Non-manufacturing PMI (JAN)
Feb 03
USD ICSC Chain Store Sales (JAN)
CNY Industrial Profits YTD (DEC)
02:00 CHF UBS Real Estate Bubble Index (4Q)
03:55 EUR German Purchasing Manager Index Services (JAN F)
04:00 EUR Euro-Zone Purchasing Manager Index Composite (JAN F)
04:00 EUR Euro-Zone Purchasing Manager Index Services (JAN F)
04:30 GBP Purchasing Manager Index Services (JAN)
05:00 EUR Euro-Zone Retail Sales (DEC)***
07:00 CAD Unemployment Rate (JAN)***
07:00 CAD Net Change in Employment (JAN)***
07:00 CAD Full Time Employment Change (JAN)
07:00 CAD Part Time Employment Change (JAN)
07:00 CAD Participation Rate (JAN)
08:30 USD Change in Non-farm Payrolls (JAN)***
08:30 USD Change in Private Payrolls (JAN)
08:30 USD Change in Manufacturing Payrolls (JAN)
08:30 USD Unemployment Rate (JAN)***
08:30 USD Avg Hourly Earning All Employees (JAN)
08:30 USD Avg Weekly Hours All Employees (JAN)
08:30 Underemployment Rate (U6) (JAN)
10:00 USD ISM Non-Manufacturing Composite (JAN)
10:00 USD Factory Orders (DEC)
*** Highly influential
Monday, Jan 30, 2012
Before: ARW, CAJ, CFFN, CHFC, GCI, HAE, PHG, KYO, ONB, SIFY, TNB, WEN, WWW
During: PEBK
After: BIRT, AEIS, ALGN, ARRY, BMTC, EEQ, EEP, FFCH, FIBK, GGG, HTLF, HOLX, ICUI, IDTI, KRC, MCK, MSPD, NAVR, OLN, OFG, PRXL, PXLW, PCL, RGA, RCII, RTEC, SLG, SOA, SCMF, SFG, TGI
Tuesday, Jan 31, 2012
Before:
During: EOC, ENI
After: ACE, AFL, AFOP, AMZN, AMCC, AJG, AZPN, BHLB, BBOX, BXP, BRCM, CHRW, BCR, CYT, DLB, EXAR, FFIC, FTNT, GLAD, GFF, HLIT, HA, ILMN, IVAC, INYS, JKHY, JDAS, JLL, KTCC, KEYN, LFL, MANH, MTW, MPW, MTH, MSL, MWA, MTGN, NATI, PSEM, PLT, QGEN, RSYS, STX, SLGN, STLY, UBNT, UIS, VRTU, WBSN, WRB
Wednesday, Feb 1, 2012
Before: AET, ASCA, AOL, ATMI, AUDC, ALV, BEAV, BOKF, BBNK, GIB, CVLT, COCO, DSPG, ENR, ENTG, EPD, BEN, HFWA, HSY, HVB, IACI, ITG, KFFG, LQDT, MAN, MDCI, MGAM, NDAQ, NI, NOC, OIIM, PGC, RDWR, ST, SU, TMO, TUP, VHS, WHR
During: CCNE, MRO
After: ADEP, ABCO, ALGT, ALL, DOX, AFG, AMP, AIZ, ATW, AVB, AVNW, BYI, SAN, BMC, CELL, CBT, CACI, CDNS, CRME, CVCY, CMG, COHU, CNQR, CLB, CMRE, CVTI, CCK, EA, EXXI, EQR, EXPO, FBHS, FXCB, GAIN, GMCR, GTAT, HAIN, HWKN, HI, ININ, ISH, ISIL, JDSU, JBSS, KMPR, LVS, MX, MDU, MEAS, MERU, MKSI, NQ, NWK, NEU, OTEX, OPWV, QCOM, QNST, RLD, REG, RBNF, SWM, SHOR, SFLY, SYA, TSO, TTEK, TSCO, TRH, VASC
Thursday, Feb 2, 2012
Before: ACM, AGN, ADS, ATK, AZN, BWINB, BZH, BHE, BX, BSX, CAM, CAH, CSL, CI, CME, CMI, DB, DO, DHX, DOW, EXP, RDEN, EVR, GR, IBCP, IP, IVC, K, KELYA, KEM, KNSY, LSTR, LEA, LII, MDC, MA, MMS, MD, MRK, MTOR, MSCI, NOV, NCI, NTWK, NYT, NUS, ODFL, PTEN, PENN, PHM, RSTI, ROP, RCL, RGLD, R, SBH, SLE, SNA, SNE, SE, HOT, SPH, SXC, SYNL, TE, TEN, BCO, TDW, TRCR, VIAB, WBC, WEC, XEL
During: BOFI
After: APKT, BEBE, BKH, BRS, CLMS, CPT, CATM, CFN, CVCO, CAVM, COLM, CNW, CTCT, BAP, CYMI, DRIV, EW, EXTR, FISV, FLXS, GNW, GIGA, GILD, HPOL, IKAN, INFN, IN, IRF, ITI, XXIA, KEX, BOOT, MCHP, MAA, MTX, MTSC, MFLX, NFG, N, NSR, EGOV, NVLS, OCLS, OPLK, OESX, PCCC, PKI, POWI, PWER, PFG, RDK, SIGI, SIMG, SIMO, SSD, SMT, SPAN, SRCL, TTWO, TSYS, EDE, THQI, TRMB, USLM, UTI, VR, VRTX, WSTG, WHG, ZIGO
Friday, Feb 3, 2012
Before: AXL, BEAM, BAH, CLX, UFS, RDY, EL, HNT, HRG, KBALB, MAC, MOD, MGI, OB, PC, SPG, SIRO, SEP, SPB, TSN, WY
During: -
After: CBNJ, WGL
About Toni Hansen
Toni is one of the most respected technical analysts and traders in the industry with a high reputation for accuracy in both bull and bear markets. She began her trading career as an equity swing trader and has since expanded into many other sectors of the market. Her style of trading and market analysis transcends both time as well as market vehicles, making it attractive to investors and trader of stocks, futures, options, ETFs, and even the FOREX market. She is a Market Analyst and Trader with www.tonihansen.com.
Check out Toni Hansen's Blog for detailed comparisons of the current daily price development to similar occurrences of price development in the past.
Toni Hansen can be reached at: tradertoni@gmail.com.
Disclaimer
Trading in securities may not be suitable for all individuals. Consult your broker or other professional to determine your suitability. This is not an offer to buy or sell securities. The advice given above is of a general nature and should not be taken as a recommendation to buy or sell the referenced security.
