Well, obviously the bulls did go home early yesterday and came back well rested today - successfully defending 1802 area following a weak overseas session. Once again, it was a moon shot off the Globex low 1802.25 and the pit session 1803.50 low today. The price action stepped higher throughout the session with very few pullbacks to speak of. We need to step back and look at the big picture and ask ourselves what has changed in the last couple of weeks?
For months the Fed has been clear about their tapering intentions with the caveat that tapering is not tightening and it will continue to be data-dependent. That leaves the door open to question the current $65 billion of monthly stimuli as the data continues to show a lot of inconsistencies in the global economies. Last month China startled market participants with poor data, but one month does not make for a trend, and besides many don’t trust their data to begin with – making next week’s flash PMI data all the more important. Speaking of trust … then we have our own politicians to thank for quietly coming together and agreeing on the debt ceiling and allowing the new Fed Chair Janet Yellen to guide the markets to higher ground as she reiterated – under testimony – the dovish lean of the Fed … but many are awaiting and “yellin” – SHOW ME THE JOBS!
Webinar Saturday – come one come all - interact with: KATHY GARBER, JACK BROZ, AND FRANK OCHOA. THEY OFFER YOU A FRESH LOOK AT THEIR TRADING LIFESTYLE AND THEIR FINE-CRAFTED TOOLS OF THE TRADE. http://bit.ly/1lpcGKo
Snippets: Dboy – Things the BEARS should be concerned about … 1) The Pit Bull’s Thursday, Friday low the week before the expiration. 2) Friday’s midmonth rebalance and possible late rip. 3) Turnaround Tuesday – S&P stats show it being up 20 / down 10 of the last 30 occurrences.
Today started with 315k ESH traded on Globex, ESH trading range was 1802.25 – 1816.75. Yesterday’s regular trading hours (RTH’s), pit session trading range was 1812.20 – 1823.00 before settling at 1817.10, up 3.5 handles.
Today’s RTH’s, pit session gapped 13 handles lower to 1803.80 – 1804.50, traded an early low of 1803.50 and up to 1808.50 in the first 15 minutes then on to 1811.00 by 9:00. It was a slow, reluctant rally, stalling out in the low teens and holding a four-handle pullback before trading up to 1821+ area and holding the 1817 area on the retest before grinding higher. Financials were relatively weak today: [XLF] -0.12%, [BKX] -0.38% while the utilities [XLU] and the [NDX] was doing much of the heavy lifting.
Kathy lunch video: http://bit.ly/1meeRVh
Midafternoon the S&P quietly traded within a few handles of the intraday high 1826.80 in light volume without pressure from either camp – consolidating. The MrTopStep imbalance Meter, MiM, slowly grew to SPX MOC buy $600mil into the close. The futures traded 1825.80 area on the cash close before settling at 1824.30, up 7.2 handles. Volume was decent, 1.6M E-minis traded.
Tonight China CPI/PPI for Jan - Eurozone Trade Balance for Dec. & GDP for 4th Qtr 4:00amCT. Coming events: http://www.investing.com/economic-calendar/
Earnings pre-market: Anglo American, [BAM], [CPB], [COTY], [H], [IPG], [ITT], [LPNT], [POR], [SJM], [SNI], ThyssenKrupp, [TRW], [VFC], [WWE]
Vital Signs: It’s Not Just Weather Holding Back Shopping - One possible reason: the jump in heating costs is diverting money that would have been spent elsewhere. Or… http://on.wsj.com/1nw60ta