Major Markets
| S&P 500 (SPX) | -0.17% |
| Dow Jones Industrials (INDU) | 0.18% |
| Nasdaq Composite (COMP) | 0.06% |
| Russell 2000 (RUT) | -0.94% |
| 10yr Treasury Yield (TNX) | -4.94% |
| Dollar Index (/DX) | 0.02% |
| Oil (/QM) | -4.46% |
| Gold(/ZG) | -2.16% |
| Volatility Index (VIX) | 1.46% |
Top 3 Sectors Up
| Retail (RTH) | 2.07% |
| Oil Service (OIH) | 1.19% |
| Pharma (PPH) | 1.06% |
Top 3 Sectors Down
| Gold Miners (GDX) | -3.62% |
| Shippers (SEA) | -3.00% |
| Broker Dealers (IAI) | -2.77% |
Market internals were weak, with increasing volume this morning. Stocks started their reversal around 12:40 this afternoon. It appeared that it may be have been short covering ahead of the 10 year Treasury auction announcement, but the oil services ETF (OIH) surprisingly made lows at around 11:30 this morning.
We did break the lows on the futures around 2:30 PM, but that was so short lived; appeared to have suckered shorts in only to rally into the close. Could Alcoa's (AA) CEO comments from yesterday been the reason?
Well, after hours, Alcoa reported better than expected earnings. It is trading up as I type this trading recap.
There was high demand for the 10 year Treasury note auction today, causing the yield to go down (prices go up, yields go down). Looks like the yield may be headed down to the 3% level.
The market liked the number, but did it? Not sure if today's action is proof of that. As I posted earlier, if long term yields keep going down, deflation fears may come back into the market. Also, is this the beginning of a rotation out of stocks and into bonds; go from risk to risk adverse? Time will tell. Just use this as part of your overall planning.
Not much came out of the G8 meeting, as President Hu left the meeting early to deal with local unrest.
We did break the neck lines on the head and shoulder patterns. This could have explained the bearish price action this morning. Funny how the pundits on TV are now talking about this. They should have read my post, for a heads-up!
Today's break does not entirely mean that we are headed to 810. The neck line will have to be tested. If it does not pass, meaning that bulls come in and start buying the market higher, then today's break will be nothing more than a fake out. We need confirmation. If we close above 900 on the S&P 500, then I will take off my bearish posture. Until we do, my stock market posture is bearish.
If you trade the 3X financial ETF's (FAS/FAZ), be aware that they will be undergoing a reverse split: FAS: 1 for 5, and FAZ: 1 for 10. These should only be used as very, very short term trading vehicles.
Tomorrow's Items of Note
- Bank of England' monetary decision, around 7:15 AM
- Weekly unemployment numbers at 8:30
- 30 Year Treasury auction results around 1:00 PM
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