PeakTrader.com

[arthur]

The daily chart below shows SPX rallied above major resistance in the low 1,160s (i.e. Fibonacci multi-year level and recent lows of the bull market), on above average volume Wed, and held that level on lower volume Thu and Fri, closing the week at over 1,171. Consequently, the low 1,160s may be major short-term support. Also, there are three major MAs working together to support SPX, i.e. the 10, 20, and 200 day MAs, while the 50 day MA continues to be resistance. I suspect, SPX will hold the 10 day MA, and fail to break the 50 day MA next week.

Moreover, May Max Pain expirations suggest SPX is generally in the middle of a trading range (also, I may add, the market often closes the week around the middle of a short-term range). The SPX May Max Pain point is currently at 1,170 with the value of puts twice the value of calls, which is bullish (since the put/call is a contrarian indicator). The OEX May Max Pain point is 555, and OEX closed the week at over 558. The QQQQ May Max Pain point is 36, and QQQQ closed at over 35 3/4 Fri. The DIA May Max Pain point is 103, and DIA closed at about 103 1/2. The OEX QQQQ and DIA May put/call ratios are all over one, although far less than SPX's two (also, I may add, these next month put-call ratios are often less than 1). The May options expire in two weeks.

Economic reports next week are: Mon Wholesale Inventories, Tue None, Wed Trade Balance, Thu Retail Sales and Unemployment Claims, Fri Business Inventories, Michigan Consumer Sentiment, and Export & Import Prices. The Retail Sales report is the most important, because consumption is two-thirds of GDP. Last week showed strong productivity growth in the first quarter, better than expected employment growth in Mar and Apr, and solid income growth in Apr. The recent data indicate the economy expanded at a moderate rate and inflation is not yet out of control.

Some notable earnings next week include:

Mon: (before open) SQNM (after close) XOMA PCLN.

Tue: CSCO TM BAY MAY EP GLBC DPZ.

Wed: DIS SIL.

Thu: DELL WMT TGT KSS CBJ EMRG.

Fri: TIF PBY AVN.

There may be an earnings opportunity to make a big gain.