Wk47: Market Recap

The shortened holiday week was not short of surprises. With the news about Dubai World’s asset woes, downward revision to 3rd quarter GDP, rise in new home sales, and a slew of other economic data, left the markets slightly lower on the week.

We have been chopping between the 1114 and 1085 level on the S&P500 and a break outside of these levels will be key in the week ahead. The chop has produced two inverted hammers on the weekly chart of the S&P.

The dollar spiked lower on Wednesday, but immediately snapped back to the $75 area. We will continue to monitor the price action in the coming weeks. As the markets have been acting inversely to the dollar a breakdown in the dollar should lead to higher stock prices.

Wk48: Market Forecast

In the week ahead look for these news announcements to act as potential market movers…

• Mon: Chicago PMI 9:45 AM ET
• Tues: Motor Vehicle Sales

• Tues: ISM Manufacturing Index 10:00 AM ET

• Tues: Pending Home Sales Index 10:00 AM ET

• Weds: ADP Employment Report 8:15 AM ET

• Weds: EIA Petroleum Status Report 10:30 AM ET

• Thurs: Jobless Claims 8:30 AM ET

• Thurs: Productivity and Costs 8:30 AM ET

• Thurs: ISM Non-Manufacturing Index 10:00 AM ET

• Thurs: EIA Natural Gas Report 10:30 AM ET

• Fri: Employment Situation 8:30 AM

Both Ben Bernanke and Barack Obama speak on Thursday.

The S&P, Dow and NASDAQ remain in uptrend’s with the Russell trending sideways. We want to see a break outside the last few weeks of consolidation before loading up one direction or another. Keep in mind however that December tends to bring upside to the market.

Wk48: Stocks to Watch

With the Russell acting relatively weak to the rest of the indices it only makes sense to look towards small caps for stocks to short. While the Dow has been the strongest of the top line figures, it is only made up of 30 stocks which are not necessarily the most trade friendly. Over the next few weeks we will continue to look at the "typical" holiday names like AMZN, AAPL, BBY, GOOG, JWM, and UPS.

Market Internals Setup

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Screen Setup

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