The Fuse
Futures are a bit flat this morning ripping higher last week and closing the month above key levels. The dow futures are up strong today thanks to positive news on medicare (UNH), while we see oil spiking hard on a new round of production cuts.
The SPX 500 closed firmly over 4100 Friday, can it stay there this week? If so, some moving averages will start turning higher. However, oscillators are extremely overbought here.
Big production cuts on crude announced over the weekend is the big item driving oil stocks today. We may see very strong moves here in the next few days as short covering takes place.
We’ll be looking at STZ and CAG along with SCHN earnings this week. It’s a slow beginning of the month but we will start getting into earnings season big time next week.
We have the jobs report coming out on Friday, but of course the markets are closed that day in observance of Good Friday. We’ll have a slew of other economic data.
Breadth has been solid the last few days and is now on a buy signal.
Volume was pretty heavy on Friday with a big monthly/quarterly expiration. That turnover should die down this coming week, but no question the buying put the chart in a strong bullish condition.
4100 on the SPX 500 now is good support, and just below there at 4040. We also now see 13K as strong support for the Nasdaq.
The Internals
What’s it mean?
It was an all-out rout by the bulls last week, with Friday being the real example. Notice how VOLD went higher and continued strong all day long, but the TICKS were impresssive – see the green arrows are far more prevalent than red. Buy programs all day long, and the ADSPD was on a trend up day. VIX is too low here and may bounce.
The Dynamite
Economic Data:
- Monday: ISM, construction spending, global PMI
- Tuesday: JOLTS, factory orders
- Wednesday: ADP, services PMI, ISM services
- Thursday: Jobless claims
- Friday: NFP report, consumer credit
Earnings this week:
- Monday: SAIC
- Tuesday: AYI, MSM
- Wednesday: CAG, SCHN
- Thursday: STZ, LEVI, WDFC
- Friday:
Fed Watch: A few fed speakers out this week but we will be watching the fed funds futures carefully, as they now portray a 50/50 chance of a hike at next month’s meeting.
Stocks to Watch
Apple – strong week and month, they declared a new WWDC coming up in June.
Crude oil – we could see a drop in crude as Japan now decides to buy Russian oil above cap levels.
Volatility – This has been crushed lately, probably too low and we could see a rebound soon.