Same patterns..
Tuesday, September 1, 2009 at 07:36AM Today was very much a replay of exactly two Mondays ago. The overseas market, namely the Shanghai index gets clobbered on worries that China's bank lending will be tightened and more supply of equity being offered to weigh down the market. We swear we saw the exact headlines two weeks ago and a 187 drop here. So, you’d expect a very downbeat market from what’s open in Europe and in the US. Well, it turned out that we only had a hint of that drop today as we actually closed at the best levels as some dip buyers came in late. The Shang flop was really not in the heads of traders. So again we say, Bears could've tried to push it lower, but once again failed as the important ~1015 held (200 month MA). Even if we slip below this level pre-Labor day, it is best not to read too much into this market because of it’s light attendance.
Financials, again are preventing the market from sliding further. They provided some strong support two weeks ago and they are here to the rescue today. It was good to see JPM, GS, WFC trade decently.
On average, most of the plays on our list dropped anywhere from 1-2% percent. It's perfectly understandable given the nature of this thin week and some ongoing fear from overseas. China is releasing their PMI # tonight and we have our national ISM number to chew on tomorrow morning. It's especially important to our commodity sector here as they are most sensitive to the Chinese PMI number.
We are still in the digesting mode since we broke out a week and half ago. This is not aggressive selling or fast money shorting, it’s a function of buyers taking a breather. The only difference between today and two weeks ago is that we are actually on firmer ground looking forward. We simply have had a string of good economic data, corporate reports/ good guidance from INTC recently to support this firmer ground and even a merger Monday that will all add up later.
Again, on a day like today, we are looking at relative performers to trade/add. Those plays that are down the least or are green simply get our vote before anything else