Following 3 premature and/or botched bounces this week, the market finally found the ingredients to make a bounce last. Why?. Firstly, no sideline money coming back (‘No Rush’), secondly no shorts in the market to create a short covering rally of substance for those 3 earlier attempts!. The combustion needed simply was not there, folks. Let’s get to this afternoon, it wasn’t crudes fall as reported to ignite the move as it was falling all day off overnight $104’s and the market had done nothing except sell off more. It was smacking 1295 SPX more than anything that set this move off. (see yesterday’s cluster note). Afterwards > 2pm, crude fell more and that’s what got some more conviction buying / covering going. Look at the Shadowlist (site attached) snapshot taken around 1:30 just before the market fell hard to 1295. What do you see?... No selling in individual stocks on the Shadowlist and thus a ES sell trade. This was not a list indicative of a market falling through Dow 12000/SPX 1300. As the market dropped to SPX1295, our stocks didn’t budge in a seemingly panicky moment at major support. Selling had clearly stalled this morning off Saudi Arabia sentiment of this contagion not spreading.
Looking ahead, the market broad following this afternoon is an 'Oily hostage' to the price of crude as it will dictate the broad market/SPX moves. Likely finish the week below 20MA, so hardly out of the woods, but indvidual stocks/ sectors should have better sentiment/oppy's to trade after this weeks woodshed moments.
Shadowlist
- Momentum/earnings/“winners of ’10- yesterday..”Hope is PCLN EPS reaction AMC generates some buy interest on this pullback”. Clearly, this helped abate the selling and generated a bid in ’10 winners names like FFIV APKT RVBD, all >4-6% and ‘11’s standouts like JNPR.
- Q4 earnings update – Another positive for market was the ‘v.good EPS reactions’ continuing as we had 3 DJIM stcoks report well, GTLS +>13%, PCLN >6% , SXCI $44 to 49’s , >6%, all excel and produce nice runs in a selling market. This again proves the premise of trading EPS reports this season and ignoring the broader market.
below: Intraday Shadowlist components
