Ahead of the open, (11-05)

The market may have finished higher, but there was little reason to rejoice the fact.  The sole reason is you can feel investors stepping further away from the turmoil by the lack of single stock action to the upside.   The only time there is buying this week is after stocks go 'deep' red and some dip buying occurs on the back of short covering.  Otherwise, ‘longs’ stay sidelined not willing to chase higher.

  

AMC,  the pile on continues with JPM shock loss news, sluggish/ short of expectations China eco’ data for April, (policy easing anticipation will grow).   Sentiment can’t get much worse, it’s hard to imagine what may turn it around. 

Into the trading week, (May 14- )

After an extremely volatile week, the Eurozone is just as unsettled heading into another week of trading.  Unfortunately this leads to ‘investors’ remaining sidelined, while fast traders go nuts.  Just one look at last week’s daily ranges from peak to trough (~20-25 SP handles) clearly demonstrates the environment.

  

Into the week,

  

Eurozone- Any chance of a surprise positive keeps the shorts from pressing further.  This is keeping a floor to the market. Shorts are pretty fragile and cover quickly.   Finance min. meetings , leader meetings will once again provide continuous headlines to jolt market around.  Spain’s gov’t/ bank plan on Friday was underwhelming. (yields will be focused on)

  

Eco’ data-  first May data points come via Empire/ Phily surveys.  Throw in FOMC minutes release on Wednesday.  Only game changer possibility right now is the NFP# and that’s far away.

  

Earnings-  After CSCO, a tech conference and tech earnings (April end’s) this week will be watched to see if CSCO was company specific.   INTC update late in week improved sentiment on this topic, but all ‘enterprise’ related names were already under substantial pressure (ie.CRM FIIV ..). Big retailers like HD,TGT report to get a feed on April trends in this space.

Ahead of the open, (15-05)

Today was almost like every other day in the past 2 weeks.  Only difference to this day was no intraday recovery took place.  Despite the SP closing lower 7 of the last 9 days and bloodied European markets today, SP still finds itself holding March lows.  If this ain’t the silver lining,  it’s down to low 1320’s. 

  

As long as the fear of a ‘positive’ European headline exists, shorts don’t press too much (yet are gaining confidence off closes like this without intraday bounces).   On the other hand, the longer Europe doesn’t blow up, longs will become more confident in stepping back up as is usually the case.  Sooner or later fear abates.   Today, it seemed US markets were reacting more (Fins’ <2%) to the JPM debacle than the fire in Europe, which indicates panic is not here.

  

All in, there is not much to say about the market, except  hope for pockets where market trades off something else.   Something hopefully encouraging!

Ahead of the open, (16-05)

US equities tried to bounce but once again couldn’t hold their gains and the major US indices ended mildly in the red (specifically, fears of a Greek deposit flight and remarks by Boehner weighed on markets this afternoon).  The early strength was always very tentative and never had a lot of “real” support behind it.  Trends haven’t changed a whole lot.  The only buy demand increasingly has come from covering and when this covering peters out, as we saw Thurs, Fri, Mon , and again Tues, the tape has a hard time sustaining gains (note that the S&P has pulled back now ~6% in pretty much a straight line since peaking near-term at 1415 back on 5/1 after the ISM manufacturing print).

 

Eco data came in better-than-expected, inc. in the US Empire, NAHB and part of retail was stronger. However, none of these figures was game changing and while they provided some excuses for shorts to cover, they never prompted a lot of “real” long purchases (and keep in mind the Chinese data for Apr continues to fall short of expectations, the FDI figures today were the latest).

  

Despite a better economic backdrop Tues, Greece (and Europe) remains an overhang and is sapping any risk appetite. Note that there wasn’t a big uptick in volumes on the Tues sell-off - it was more the case of early buy demand completely evaporating.  Bulls may point to the R2K outperformance and builder strength.

Ahead of the open, (17-05)

Market frustrating cycle of the past 2 weeks continues with no end in sight. 

 

A monotonous bleed with the same overnight/ intraday trends based on fear mongering (now deposit flight from Greece/Spain), solution speculation all based on headlines originating from Europe.  It's no wonder that once short covering ends, buying demand peters out and market falls into the close on a daily basis.  Instead of dealing with this cycle, money just remains or becomes sidelined waiting for clarity before getting involved.  The only thing keeping the market from panic is the possibility of a grand solution as the idea of keeping Greece in the zone is in the ECB interests to avoid chaos.  If market doesn’t come to grip with this idea that ECB will come in mitigate the crisis, we could be dealing with this environment till June 17/Greece elections.

Ahead of the open, (18-05)

Early in the week, discussed market’s only silver lining was holding March low’s, but if that was to break we’d see low SP 1320’s. Not only has the break occurred, but now the market lies lower at a band of support in the 1290-1300 as the selling has accelerated with shorts becoming more comfortable.  The negative developments accumulate in Europe as faith in ECB powers dwindles, but if that wasn’t enough US data (Philly Survey) today was lousy adding to the negative sentiment.  

  

A temporary rebound is increasingly closer as world markets have suffered enough this week.   A starter might be headline risk of Greek polls results, plus we’re heading into the G8 meetings.   Eventually, an upside lid at this week's SP1340 break level will be present as ‘longs’ caught in the downdraft will look to take profits. 

Into the trading week, (21-05)

The Facebook hype, including speculation of a lift to market never materialized leading up the IPO nor post the IPO morning.  The ever rising expectations off Facebook never made it here as an upside catalytic event, this is probably the first mention of what turned out to be a major disappointment on many levels.   This capped off of an awful week, SP is now  down 9% off 2012 highs, primarily due to risk appetite deterioration due to Europe.  Correction zone of >10% seems inevitable at some point as investors fear this is tougher to resolve than last year’s liquidity crisis.  Besides the primary negative driver, secondary ones are gaining traction (China growth (Steel off 20% MTD), lousy Phily survey, Washington fiscal fears).  *First ever US Flash PMI will be released on the 24th, alongside the China/ EU numbers on May economic growth.

 

All in, nobody wants to step in and defend this market making it a spectator sport of sorts.  Only question is with sentiment low at a pivot point on the SP (1292), will an oversold bounce begin shortly?.  Even if it does bounce , the market world will still wait on Greek elections and ECB neutrailzations.

Ahead of the open, (22-05)

Although, the market was relatively flat premarket and open, a steady ladder climb of 20 handles ensued with small caps (R2K) leading the way with many single stocks in the group up 3-5%.  Despite the gains, the rally didn’t seem that strong in scope to suggest anything other than an oversold bounce. 

  

The morning update lead of possible game changing chatter caught on as the day progressed, culminating in afternoon FT articles on some of the subjects keeping the rally into the close.  Although, the chances of any intervention is small before the Greek elections, the chatter is essential to keep a floor (SP 1292 ) to the market.  Unfortunately, this all relates to political maneuvering with no one wanting to tip its hand and/or destroy months of work.  It’s as messy as it gets with uncertainty remaining till elections.

 

Away from Europe, China Wen remarks on pro-growth helped some as well.  Still, at this point SP 1240 looks to be a barrier on any bounce as noted last week.

Ahead of the open, (23-05)

Today’s vanishing follow through gains to previous days snap back rally was no surprise, if you’ve been following the daily market tribulations for the past few weeks.  The intraday action was no different than recent activity once short covering peters out and no real buying appears to take over.  Gains simply vanish and rallies lose momentum. Also, as said last week profit taking will also play a role as market climbs towards SP~ 1340.  Incidentally, today’s late turn can be attributed to yesterday’s line concerning, ..”…political maneuvering”.   as former Greek PM’s fear mongering ( prepping for Euro exit) reversed the market.  Market will move on every word from past and present EU leaders, all have some motive.

 

 

“..the rally didn’t seem that strong in scope to suggest anything other than an oversold bounce”.  All in, the above note into the trading day seemed to be justified.  Still, there is room to run in the days ahead as long as SP ~1310 holds, the continuation just won’t come from recent 'extreme' oversold conditions.  Squeezes will occur regularly on EU/ECB positive speculation, but the depressed longs will have to come back to avoid days like this.   All in, we’re back to dealing with summits, dinners (Wed night), meetings (ECB June 7) and the speculation they will fuel and more often than not, disappoint once finished.

Ahead of the open, (24-05)

The U.S market got a blessing this morning as Europe decided to play catch up on Tuesday afternoons random speculation.  The DJ Euro Stoxx was down nearly 3% after what was an uneventful overnight.  Only possible driver was the U.S market fall off those Greek comments (prepping for exit) and all publications running this as the ‘story’.  Only thing for ES futures to do was fall alongside Europe and follow it into their ugly close.  The blessing is this put the U.S market back at oversold conditions at SP 1296 on nothing new and allowed for that ‘ squeezy’ feeling to commence once again. 

 

The mid- day boxscore might have looked ugly with DJIA off ~180pts, SP off `~20 handles at lows, but the selling pressure was not panicked. (Decided to take a snapshot of theShadowlist (attached) at about 10:30am to show this,( Dow off 150, SP at 1300). Eventual turn into a 25 handle move was possible due to what was evident in the list).  There was no sign of single stock sell offs, thus no panic and only indication of mostly fast traders driving the ES/SP /ETF’s. 

 

“Squeezes will occur regularly ..”…All it took was ‘fresh’ random leader quotes, speculation and Monday’s squeeze would be here again and that’s pretty well what happened as headlines began to cross.  Of course as soon as leaders began arriving in their shiny limos in Brussels for tonight’s 6 hr dinner(summit) the flow began.  All in, the chances of anything being cooked up for leftovers tomorrow is slim (market is well aware no decisions will be made).  Some groundwork being made for late June’s meet up is likely the only bit to come out.

 

The trading action today will bring in some speculation that a re-test of the bottom occurred therefore a bottom could be in place. In this view, it may good enough to get near SP 1240 in the short term (up to June 17) … “Still, there is room to run in the days ahead as long as SP ~1310 holds (23-05)…but to speculate it’s a bottom is way off with Greece in limbo.  Also , as unimpressive the sell -off looked, the reversal wasn’t all that impressive either.

24/05, Global Flash PMI’s , Incl. U.S, I.Claims #

Update on Thursday, May 24, 2012 at 08:50AM by Demi/ YourPersonalTrader

.A.M update

  

Signs market may have legs to resistance area ~SP1340 evident this morning.  Rather than being down on a plethora of what would usually be negatives, it’s slightly positive and continuing yesterday’s squeeze.  (Dismal European PMI’s, NTAP guidance following CTSH, DELL, CSCO, show macro worries hitting tech corporates, TIF earnings,  no surprises from summit, yet market isn’t no selling off the previous days late advances, U.S eco’ data inconclusive at best.  All of that, but market is looking at the possibility of ECB implementing liquidity measures instead (at June/or July meeting).  

 

This is a gear shift to look on the bright side of possible European responses than only looking at what if Greece exits as has been the case of late.  Now, question is if more press on Greece exits hits, will market ignore?.  If so, sentiment shift is o

Ahead of the open, (25-05)

Signs market may have legs to resistance area ~SP1340 evident this morning. Rather than being down on a plethora of what would usually be negatives, it’s slightly positive and continuing yesterday’s squeeze.  (Dismal European PMI’s, NTAP guidance following CTSH, DELL, CScCO, show macro worries hitting tech corporates, TIF earnings,  no surprises from summit, yet market isn’t no selling off the previous days late advances, U.S eco’ data inconclusive at best.  All of that, but market is looking at the possibility of ECB implementing liquidity measures instead (at June/or July meeting).  This is a gear shift to look on the bright side of possible European responses than only looking at what if Greece exits as has been the case of late.  Now, question is if more press on Greece exits hits, will market ignore?.  If so, sentiment shift is occurring.

__________________________________________________________________________________________________________

The market narrative expressed in morning update held throughout the day,(very likely into the long weekend as well).  All in, a constructive day considering the things market had against it going into the day.  Also, market shrugged off could have been construed a big negative intraday (Greek Poll showing anti- austerity Syriza gaining support).  Really couldn`t have asked for anything else today to go `long` some.  Is it a shift or just thinning liquidity into long weekend and exhausted selling.  Likely a combination of all.  Also, technically bounced off the SP 1310 intraday noted a few times this week.

Into the trading week, (May 29- )

A dreadful May luckily ends in a shortened 4 day trading week.  So far in May, the market has closed in the green maybe 4-5 times at best, but with a holiday week this number may grow 50%.  If Friday’s trading volume is any indication, liquidity will remain thin and market may use ‘window dressing’ as catalyst of sorts working off Thursday’s trade where  a ton of ‘bad news’ was shrugged off. This allowed  SP ~1310 support to hold to close off the week.   Also, (Monday) Spain’s yields spike to mid 6%, yet European markets seemingly shrugged it off for now as have ES futures.  At this point, it seems markets have priced in their depressed sentiment momentarily using a favorable new Greek Poll as a market driver instead.  (China chat of a larger stimulus package helping).   Simply put, while there are many reasons to be generally short risky assets, it may no longer appear attractive to get shorter at current levels.  Late last week, dismal Global PMI’s, U.S tech earnings, a ‘building block only’ summit and the ‘shrugging off’ mentality of these events suggests near term negativity is likely running dry.  Don’t forget the JPM/Facebook debacles are still background negatives in the daily market narrative.

 

Still, as discussed days ago, any lift to SP 1340 levels will likely be sold into ahead of Greek elections. Any policy response prior may probe this level as you never know how hard the market will squeeze, so 1340 level can easily turn to 1350’ish.

 

Part of the quiet week ahead is the lack of corporate news and Friday’s Global PMI’s will mean little as “flash” PMI’s are enough this time around. Focus will turn back to NFP#, eventually putting the June 20 FOMC meet up into the spotlight.

Ahead of the open, (30-05)

Last week the market tacked on most of its weekly gain in one day (Monday), today on the first trading of the week, it possibly did the same thing.  Simply with correlations high, individual stock picking is almost out the door, you basically have to find a place to go ‘long some ‘ SPY/ETF’s as here late last week and hope for a mini rally day.   Unfortunately, today’s morning ramp close to 1340~ (1334 SP high) was sold into as speculated.   Although, the market crept back to close at 1332, you clearly see this is going to be a problem and so you almost have to mimic the actions of others and sell.  One day rallies and days of sew saw trading in between may be the norm for a while.

 

All in, not a lot of real things (positive drivers) occurring.  Instead with thin liquidity, market rallies on pure speculation (Greek polls will hold, Spain bank reforms, China stimuli chatter).  The idea of another LTRO like policy is keeping U.S markets from fearing Spanish yields creeping to 7%, while fresh China rumors of big stimulus round out the ‘hope’ play.  Unfortunately, that’s not going to get real money chasing the market aggressively.

Ahead of the open, (31-05)

Day started messy …and finished ugly (SP 1313)!  That not only sums the day, but also the month of May.  All U.S major indexes now off >6% as the May equity shellacking continued with markets erasing previous days rally.   All the right sectors that were responsible for rally on Tuesday were the culprits for today’s downfall.  To no surprise, any optimism and/or ‘hope’ over the Eurozone faded overnight with Spanish yields crying ‘bailout’ time.  

 

*Athens, Dublin and Lisbon lasted just 16, 24 and 34 days after the premium they pay to borrow over Germany reached 500 basis points before seeking international help. Spain hit 500bp on Monday (currently 533bps). FT

   

The next few days, U.S markets will focus on its saving grace (employment…housing).  The ADP (150k), Initial claims (370k)on Thursday and NFP# (150k) need to come at consensus.   If these numbers falter, the market will have nothing to hang its coat on. 

  

Today, retailers got smacked around as one firm (Cleveland research) has taken advantage of fragile market sentiment to nail some names lately. Considering the market has nothing to play individually, it goes after these type of calls twice as hard to the downside. This unknown firm has recently shattered TSCO and today it was KSS, SHLD..  SSS# for retailers are out Thursday and hopefully they can refute this ‘cautious’ call.

Ahead of the open, (06-01)

 Into the trading day, we discussed a change of focus from Europe to U.S markets (saving grace) of domestic economic data to close off the week. Unfortunately, the bevy of data left little for the market to” hang its coat on”, as it all fell short of expectations. (ADP, challenger job cut surge, I.C#, Chi PMI, GDP, JOYG guidance on China demand).  A sell off through 1310 down to a day low of 1398 in the morning ensued.  An implausible recovery to above 1310 did occurr by close.  Did the market shrug off a bunch of negatives again?? (like last Thursday).  Believed it last week, but this is all a little too much unless market has truly started climb the wall of worry.  Maybe at lower prices it will, but this wall combined with Eurozone, China in the background is too steep at the moment.  All of the data showed Europe has started to affect the way U.S corporations are looking at the situation making for slowing growth. This has been discussed since CSCO echoed this sentiment a few weeks ago (CTSH, DELL, NTAP), ADP # voiced a slowdown in recent hiring.  Don’t forget this on top of recent sluggish flash PMI’s, which doesn’t bode well for overnight official readings around the globe and/or NFP#.

 

The only positive is a handful of retailers are showing little effect from all the depressed sentiment as SSS# came in strong in places. Some rotation into the more U.S only consumer discretionary stocks may still occur or else its boring telecom/Utilities for the those interested in equity assets.