Ugly 30min close..

Well,  it looked like a good start to the trading day as we hit new intraday highs on the heels of the financials (GS JPM notably higher) off BAC news leading (which included numerous upgrades).  Soon after the ISM disappointed many, even if we think most of the smart money expected such.  This produced another failed day where the highs couldn’t hold, later the financials rolled over which eventually led to an ugly 30min close and more signs the market is losing momo as it nears 1120SPX.   It's the fact that important sectors reversed intraday that is frustrating to the traders, including us,  which led to our alert of "more caution"  30 minutes before the selling hit.

As we mentioned in the most recent journal conviction buying (volume) is needed to break this market out of the recent range.   Having the financial group, (yep, once again),  breakdown intraday worries this market.   We're simply getting used to it after seeing failures of putting even a back to back positive day consistently.   The sector as a group is trading near the recent low and we'd very much like to see them to hold this support.  Even the one positive all day and week, the SEMI's  hit new highs, but couldn't hold it.   This failure in the SMH  around 2:45pm was the final straw for us after already witnessing the financial group failure earlier in the day in issuing a cautionary alert.   Note, MRVL  reported a terrific Q report AMC and it will be interesting to see if this group can try to reclaim highs soon.

Will tomorrow's NFP report given investors a reason to cheer this market?   At this point, we don't expect a big surprise from the job report in either direction.    However, we do think that we need a big positive surprise to get this market over the recent high.  (A close between SPX1115 to 1120 is needed badly to even think of a breakout eventually).   On the other hand, even if we get sold off from an unfriendly job report,  we'd think there's still a strong underlying bid from the buyers, but do recall what we always say and that is fast sell offs need to settle down before the bull bid comes back. 

We are definitely seeing some good flow out there this week.    Just remember, exactly one week ago today, we were faced with news from Dubai that spooked many around the world.   Right now, things are back to normal and we are back focusing on the Economic side of things.    As long as things are within expectation, this bull market is still intact and our trading strategy won't change in part due to the what is usually December bullish seasonality.