Daily Wrap

Today the markets Started with a gap down over 10 points on the S&P 500 but quickly bottomed and started to rebound.  That rebound took the index all the way back to positive territory resulting in a nearly 20 point rally off the lows.  The index also retook the 200 Day MA but around 11:15 am EST the rally peaked and the midday slowly drifted back down morphing into a hard sell off into the close and leaving us at 1374.53 on the S&P 500.  This marks the 3rd day closing below the 200 Day SMA.  The 60 minute SPY chart may still be producing an inverse H&S pattern as long as we hold above $137.55 and could then target higher levels including $140.60 and then possible filling the gap around $143.

Many retail stocks were in the news today after reporting earnings including Michael Kors (KORS) which was slightly up and TJX Companies (TJX) and Home Depot (HD) which gained 2.7% and 3.6% respectively.

Also in the news today was Microsoft (MSFT) which lost 3.2% after announcing the departure of Steven Sinofsky.  Mr. Sinofsky was the President of Windows and Windows Live and by many was thought of as a likely replacement to Steve Balmer.

There is a fair amount of economic data scheduled for tomorrow including MBA Mortgage Index at 7am EST, October retail sales, PPI, and core PPI at 8:30am EST, September business inventories at 10am EST and FOMC minutes at 2pm EST.

Bireifing.com reports the following stocks are scheduled to report earnings before the open: ANF, DWSN, AG, MTOR, SORL, SPLS, TYC, VVTV

Back to the markets and the SPY.  We have a potential inverse H&S pattern which can take us to the levels outlined in the chart.  It is important we do not lose the 11/13/12 lows or the market could be facing a deeper decline.

That’s a wrap for tonight.  I will see you tomorrow!