ProActInvest.net Weekly Stock Market Commentary for 01/17/12
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Today's trading was rather lackluster - volume was anemic as players awaiting more earnings reports (as we enter the meaty part of earnings season) and this week's inflation (PPI on Wednesday and CPI on Thursday) and housing figures. Industrial production figures will also be watched tomorrow pre-market.
After gapping up nicely, stocks pulled back and gave back most of their gains - the small cap index (IWM) finished down on the day, while the SPY and QQQ held on in positive territory.
As IWM pulled back, ProActInvest.net's chief weekly market indicator turned slightly negative, while the longer-term intermediate signal is still positive. Active traders may want to stay flat until one of two things happens: if we break the key 75.95 support level for the IWM we suggest that active traders short the market; if we go higher and break through the 76.84 resistance area we suggest re-opening long positions. (Please see the chart below).
Longer-term equity investors should stay long for now.
ProActInvest.net scanned the key markets and can't seem to find many attractive plays in terms of reward/risk. This coincides with the lackluster market noted above as we enter earnings season and await the economic figures as well as to see whether the Euro will hold the 125 support area for sure. The Euro finished the day at 126.83, off Friday's low just above 126.00 The key level to watch again is 125.00 on the long-term chart. (Please see the chart below).
Charts of the Week
IWM small cap benchmark index short-term suport and resistance levels as of January 17,2012
Forex: USD/Euro still testing long-term 125.00 support level