Close lower ahead of bank stress test

Index & Sector performance 3/26/14

The Market:

Early morning upside action quickly reversed and started a strong sell off which broke the short term uptrend line in the emini, back-tested and then continued lower into late day trading.  Yet again the 1856ES region was a key short term level and now is strong resistance but the emini will have to first get through 1847ES to start and build a bull case, otherwise don’t be surprised to see the S&P test the 50 day moving average which is roughly 15 points lower.

S&P 500 emini 3/26/14

Economic data week of 3/24/14

Reporting EPS 3/27/14 Pre-Market:

Companies reporting EPS 3/27/14 pre-market

Analyst Comments:

Upgrades 3/26/14

Downgrades 3/26/14

Initiations 3/26/14

Price Target Changes 3/26/14

Chart of the Day:

Today’s chart is Toyota Motors (TM).  This is a name we have been watching as we believed the correction which started after the 8/2/13 closing high was finally nearing completion.  TM gaped higher in today’s trading after an announcement of a buyback.  Frankly, the buyback is not very impressive to us coming in just under 2% of the outstanding but the reaction shows that sentiment to TM might be switching from negative to more positive.

The recent 3/20/14 lows correlate nicely with the 38% retracement from the 11/23/11 lows to the 8/2/13 highs and while we would have preferred to see positive divergence on the MACD to help the cause, it may not ultimately be necessary.  If TM is indeed out of the woods and headed for greener pastures then we expect there will be multiple trade opportunities that set-up in the name going forward.  For now we would expect the 3/20/14 lows of $106.31 to hold and if lost then we would step back and re-evaluate.

Toyota Motors (TM)