As 1280 invokes ‘R’ for the past week, the market impulsively sells off here and will continue to find an excuse to take some profits. On Friday, it was something completely immaterial in the ‘big picture’.(Mass. Foreclosure ruling). Does any investor in Europe/ China give a damn and/or make an investing decision based on such with Sovereign debt/Inflation questions unresolved, respectively? The answer is definite no-no, but in the US markets it’s reason enough to test 1260 support again!. What was relevant and material was a weaker than hoped for NFP# , but a justifying Bernanke keeping QE2 ‘ alive and on track’ was much more important and offset the #. If anything, the jobs number calls for QE3. As far as the tape during the midday antics, it looked more ETF/ES driven as single stocks (exc. Financials/Banks), hardly twitched in either direction. Indication is holders of stock are reluctant to sell as much as they are reluctant to buy more.
Technical- 1256SPX 20ma (DJIM Benchmark for a few years now) is in focus and if broken will likely lead to a correction as shorts may finally lay out some exposure. As per ‘RUT’ of a day' post last week, the RUT has now lagged the SPX for consecutive weeks and could be foreshadowing ‘tiredness’ for the rest of the market.
Tailwinds – (potential) Q4 earnings should come in better than Q3. Shorts are not laying out positions ahead of potential train/ minimizing downside for now.
Headwinds- wary- (potential) US markets oblivious to rising Contagion noise again. A case of shrugging it off or complacency at work?. Looks like complacency in this view.
Shadowlist