S&P Futures play MA pinball
Index & Sector performance 12/16/13
The Market:
The made strong gains today after what looked like a horrible start to the week. In overnight trading Sunday the S&P 500 dropped t0 $1754 (March 2014 emini contract) tagging the 50 day SMA and then built a rally off that support. Surprisingly by the morning the futures had not only regained everything that was lost from Sunday evening’s open but also but in some gains. Those who do not look at the futures may have never even known of the rough start. The futures then rallied pre-market to the 20 day SMA on the upside and that marked the high for the day essentially playing pin ball between the two major MAs.
While nothing that might be considered major, there was a fair amount of economic data released today. Empire State Manufacturing came in well below expectations but better than the previous month. Flash Manufacturing PMI also came in below expectations but Capacity Utilization rates and Industrial Productions both beat. Tomorrow we get CPI and the NAHB Housing Market Index.
Story Stocks:
LSI Corporation (LSI) gained 38.56% after agreeing to be acquired by Avago Technologies (AVGO) for $11.15 per share.
Wall Street rewarded AerCap (AER) sending the stock up 33.05% after the company announced they acquired Lease Finance Corporation from American International Group (AIG). AIG is receiving $3B in cash and 97.6M shares of AER common stock. AIG also closed slightly higher on the deal.
Sprint (S) started off the day with a gap higher on speculation the company was in talks to takeover T-Mobile US (TMUS) but the optimism fizzled as the stock ended up closing 1.42% lower on the day. David Faber of CNBC reported that there are no such talks in place but Citigroup analysts were positive on the potential merger believing it could add value to S.
The following noteworthy companies are scheduled to report earnings before tomorrow’s open: SAFM
Analyst Comments:
Upgrades 12/16/13
Downgrades 12/16/13
Initiations 12/16/13
Price Target Changes 12/16/13
The Game Plan:
Yet again the S&P has set the high and low region to watch for and this time it is best to look at the futures (March 2014 contract). Sunday’s sell off tagged the 50 day SMA, held and rallied right to the 20 day SMA where the market then retreated. Above the 20 and the market can challenge the recent double top but below Sunday’s lows and we are likely in that longer (lower) consolidation period.
Since the market is not far from the 20 day but is over 20 points away from the 50 day, some levels to watch on the downside, again all emini futures on the March ’14 contract, are $1776 and $1770.
S&P 500 e-mini daily (chart from earlier in the trading day)
S&P 500 emini 15 min chart