The bulls did another tap dance with support on Tuesday but lost their second-straight session to start the week. Much of the slight pullback, in our opinion, has been the market waiting on 4Q earnings to start which got underway last night after the close. We aren’t too worried about what companies report as far as earnings per share as we are more interested to see if revenues are growing.
The Dow fell 55 points, or 0.4%, to finish at 13,328 on Tuesday. The blue-chips traded to a low of 13,293 before closing above 13,300 but the bulls will need to clear 13,400 to regain the lost momentum from last week. The bears are still trying to push the needle back below 13,200 and will need a lower low to keep their flow going.
The S&P skidded 5 points, or 0.3%, to settle at 1,457. The index kissed a low of 1,451.64 intraday but support held at 1,450 like a classic Bob Seger song. There is risk down to 1,425 should this level crack while a close above 1,467 would be bullish for a run past 1,475 and up to 1,500.
The Nasdaq declined 7 points, or 0.2%, to close at 3,091. Tech raced to 3,103 at the open but tested a low of 3,076 just before Wall Street’s lunch break. We said to look for 3,075 to hold but there is trouble down to 3,050 if the bulls let this level slip. We are looking for a close back above 3,100 and anything over 3,102 will be gravy.
Alcoa (AA, $9.10, flat) topped estimates after the close yesterday and shares were up a dime in after-hours. It’s hard to get excited about this “blue-chip” stock but it has made us money in the past. More importantly, its had a positive impact on futures which are looking up as we head to press: Dow (+28); S&P 500 (+2); Nasdaq 100 (+2).
We got some nice pin action before the close yesterday and we still see a lot of trades we like, both calls and puts. Subscribers, check the Members Area for the updates and watch you email inbox after the open in case we pick some low hanging fruit.