(By Rich Bieglmeier) Stocks are having a difficult time digesting Turkey week gains. As we wrote in Monday's i On the Market, the Dow, NASDAQ, and S&P we pressed against two layers of resistance, the top trend-line of a descending, trading-channel and horizontal resistance.
Tuesday's volume slightly outpaced Monday's effort, and that's somewhat concerning considering the equity markets backed up as volume increased. It won't take too much to wipe out all of Turkey's fun since it was built on straw volume.
Surprisingly, news of another Greek Band-Aid and a better than expected Durable Goods Orders report weren't enough to get stock into the green. Again, it is a little concerning when good news is not greeted happily by bulls; although, a print of 0.0 isn't exactly hitting the ball out of the park, it is better than the -0.8% forecast.
All hope is not lost if the tape remains red until D.C. figures out a plan to avert the fiscal cliff. Hint, Republicans will rollover, taxes will go up immediately, and spending cuts will be scheduled to start when eight-year olds graduate from high school. Has any president/congress since Calvin Coolidge actually cut spending, not just the growth rate of spending?
Fiscal cannonball or not, if bears take bulls by the horns and rub their faces in the dirt, it could prove to be a positive provided the equity indexes manage to pivot higher before sinking below mid-November's lows.
A key marker for any sustained change in direction is a failure to make fresh, cycle highs/lows. If bulls can regroup by say 1.375 for the S&P, 2.925ish for the NASDAQ, and around 12,800 for the Dow, and then race higher than Black-Friday's closing prices, a new uptrend might take hold.
New Home Sales might be able to help the markets get off to a good start. Results for October are anticipated to come in at 387,000, down 2,000 from September's number. With Superstorm Sandy hitting east coast shores at the end of October, we wouldn't be surprised if sales ticked down more than 2,000; however, signs of a continued housing recovery should help stocks.
Finally, iStock examined the charts for NASDAQ 100 members to identify stocks with bullish and bearish appearances. Perhaps, we'll make it a regular Wednesday feature?
Bullish Charts: AVGO, CTRP, GMCR, NUAN, SRCL
Bearish Charts: AKAM, CTXS, SHLD, STX