Today started with another round of light volume, although well above the anemic pre-holiday trading, of 136k on Globex in the E-mini S&P 500 and more downside pressure during the regular trading hours. The S&P gapped 2.5 handles higher to 1829.50 – 1828.80 on the pit session opening before printing a morning high 1832.50 and printed an intraday low of 1823.30, holding above yesterday’s low.
With the New Year holiday winding down and the snowstorm heading to the East Coast, there was only modest trading volume during the morning to midday session.
Also, there was chatter of the January effect being thrown off by the weather conditions and that yesterday’s profit-taking might not lead to a more sizeable decline in the near future.
The tech sector turned lower as the 2014 profit-taking / 2013 tax dodge began to play out. Posted last week by Barry_S: there are some smart guys expecting a pullback the first week. the guys that did capitalize on the 25% move up in 2013 can sell early 2014 to protect profit and not face tax consequences until end of year next year. SnoMan as far as taxes that’s exactly it – write off losses now for 2013 and delay payments to end of 2014 for gains. Adding to the tech weakness, yesterday Wells Fargo lowered their rating on [AAPL] and Goldman cut a bunch of semis and today JPM’s C Danely noted: Nov semi sales fall short of expectations. JPM trims ’13 semi industry growth forecasts from +6% to +5%; also cutting ’14 sales forecast from +12% to +8%. Roger_S (10:36) TF still holding above the opening low as the S&P was testing the 10 handle move, ES RTH. Note: http://mrtopstep.com/trading-101/ PivotBoss (11:08) 1833/34 has been my key zone all week…still weak below it after today’s rejection…1820-22 is clear zone of support, but a break introduces intraday targets at 19 and 15.50, with key level at 14 and 06.75 down below. Following the 1828.50 morning low, the equities quietly bounced sideways to modestly higher in light volume and went on to convert the opening range to support while the retest of the morning high fell just short as the MrTopStep imbalance Meter, MiM, was showing about 80%, $300M, to the sell side as futures traded 1825.20 area, down 1 handle on the 3:00 cash close as Fed Chairman Ben Bernanke bids a fond farewell – hopefully he was saying goodbye to us and not bye-bye to the equity markets …
Coming events: http://www.investing.com/economic-calendar/
The Big Bang Theory: Is the U.S. economy really about to go boom? Politico: Something important will get better in 2014: Fiscal policy will stop hurting the economy. The results should show up as expansion in such service sectors as health, education and construction. Read more: http://politi.co/1dtl3lv