It was a actually a good underlying tape to market naysayers as a few ‘defensive’ sectors led the market higher, but as far as DJIM’s underlying ‘Shadowlist’ tape, it was a second consecutive day of managers swallowing PA pills of mid/small caps as evident in the R2K's 2:1 outperformance of the major indicies. (*DJIM not liking SOX performance for a NAZ up >20pts intaday). Yesterday’s winners rested and a fresh batch of DJIM plays took over. (see attachment on site). R2K is at 2007 levels. So all cool here today, but broad market is probably signalling a halt coming due to some internals today.
We entered the week in anticipation of …1) “…many are behind the ball on it (as in surprised). This coming into a month end/Q end is where a PA pill (performance anxiety) will likely be swallowed by managers to play catch .. (many thought it was done with prior weeks gains because many times front running the final week occurs). 2) There’s a cluster of “R’ around 1313-1319, but once a close occurs over, the market will have higher sights in mind and it should happen this week. 3) rally…”It could continue until Friday as investors/traders await all the data/QE2 for that day.”.
Taking into account all 3 have taken place this week, today was another 11-12 SPX at day’s peak to March highs, so thoughts of continuation over new "R" into Friday morning is a little too much to imagine. All in, the market has set itself up (disappointment?) Friday’s eco data, notably Global PMI’s and the effect all the Global macro issues (Libya-oil/ Japan) have had on the numbers. The NFP# shouldn’t be as important, but if it surprises big to the upside it will likely be a negative for market as Fed comments have become more ‘ hawkish’, as some today. Note, we are another “R” cluster to low 1330's-1335, still a break is clear sailing to years highs.