Retail Sales laid an egg casting a dark cloud on today's trading. It is surprising that the weak retail sales data did not do more damage to equities. In May 2006, weak retail sales number sent markets over the edge, reference a chart from back then to see the carnage that weak retail sales can create. However, the markets may have dodged another bullet. Empire State manufacturing beat expectations. Business Inventories a few minutes ago resulted in a knee-jerk reaction higher, then a continued path lower for the SPX, now printing the lows of the day with a 1348 handle. The weak retail sales sends the 10-year yield to all time lows sub 1.45%. This behavior reinforces Keystone's ongoing deflationary prognostications. The NYA dropped under 7738 and the JJC lost the 44.15 level which is creating market selling. The new levels of interest are NYA 7748 and JJC 44.20 which makes it a bit more difficult for bulls. The 20-day MA is 1345.71. SPX 1341 and 1337 is very strong support.
Note Added 7/16/12 at 10:48 AM: JJC (copper) jumped back into the bull camp above 44.20. NYA came up for a look at 7748 but remains below in the bear camp. The drama today will center around these two characters. The JJC buoyancy causes the broad markets to move higher. Bears need to see JJC drop back under 44.20. Bulls need to see the NYA move above 7748. The market weakness helps satisfy the snap-back move needed due to the uber bullish NYAD and TRIN explained in the charts a few posts back.
Note Added 7/16/12 at 11:35 AM: Note the NYA moved above 7748 which ushered in further market bulishness. The SPX came up for a look at the 1358-1360 reisstance gauntlet discussed this weekend, and received a spank down. HOD is 1357.26. The NYA dropped back under 7748 so market weakness reappears; see if the NYA remains under 7748, or not. Simply watch NYA 7748 and JJC 44.20 for broad market direction today.
Note Added 7/16/12 at 1:29 PM: Gold closes flat at 1590-ish. The JJC remains above 44.20 which keeps the equity markets buoyant. The NYA remains below 7748 which prevents the markets from moving higher. SPX is above the 20-day MA at 1345.92 which is bullish. SPX is below the 20-week MA at 1358.79 which is bearish. Either JJC or NYA will flinch and markets will move in that direction, or, if status quo remains for JJC and NYA, markets will move out sideways into the close.
Note Added 7/16/12 at 2:02 PM: NYA is testing 7748 now. Decision time, it will either punch up thru taking markets higher, or receive a spank down and markets will continue languishing in front of Chairman Bernanke on deck tomorrow.
I just put some paint on the wall because watching it dry is more interesting than watching this market....
ReplyDeleteYes indeed Charlie, also try slicing apples and watching them turn brown, that is more interesting as well. JJC 44.20 and NYA 7748 is dictating market action. Markets are simply languishing sideways, for now. If JJC drops under 44.20, markets will reexplore the lows at SPX 1348 and lower.
ReplyDeleteHi KS, this is really boring, even though the market's been down for the 7th day, VIX is moving within a small range instead of moving up above 20-ish. This is not good for the bears. This is difficult to short or even long:(
ReplyDeleteAny comments on VIX?
The NYA is flirting with 7748; will she go home with him today or not? The cut apple has browned.... my sense is that we've worked off the overbought conditions and now just need some spark to ignite a run higher--a run that makes no sense given the global recession but it certainly feels like Mr. Market wants to move higher regardless of news. Maybe we have to wait til tomorrow to get resolution. Bad news has barely dented the market, suggesting a move higher on any sort of "earnings beat" from a bellwether.
ReplyDeleteMarkets may simply be content in waiting for the Chairman tomorrow to either hear about QE, or not, then trader's will receive clarity. Perhaps some OpEx Monday buoyancy is occurring as well today.
ReplyDeleteCRB now bullish. Perfect timing for Bernanke not to promise QE3. Your friend Art Cashin's predicting a trend change for later tomorrow or early Wednesday.
ReplyDeleteI just want to cashin LOL
ReplyDeleteInteresting Weaver, superimpose that thought from Art onto the SPX chart posted this morning that highlights the stall levels. Bernanke holds the fate of the markets in his hands over the next six weeks. Markets ahve huge expectations looking for a repeat of Jackson Hole in late summer 2010 when QE2 was announced.
ReplyDeleteArt does have the perfect name for his profession. Keystone worked with a fellow years back, his name was Cashdollar, and he was an accountant. Some of the name correlations are comical.