not so narrow tape..
Wednesday, May 11, 2011 at 07:39AM Today’s intraday tape was replicating Monday’s until a quick short covering surge at ~2:30pm of 7pts. Lots of possible newsflow reasons, but nothing concrete and worthy of being a true catalyst to move the market as it did. You’d like to see a catalyst behind a move, but it seems via recent short interest, shorts did press a little too eagerly during last week’s commodity meltdown hoping for contagion in equities.
Although the broad SP tape action was similar, the underlying tape was very different versus Monday’s ‘narrow’ tape. It widened with Retail (noted to watch into week), Financials/Transports/SOX up 50bps. Also, notably for DJIM, small caps (RUT) outperformed the large caps for a 2nd consecutive day by 90bps showing pockets are there to trade. All favourable signs, but we are close to levels SP ~1365 zone, where last profit taking began, so you figure some will want to exit here for many reasons if the ‘red flags’ are a concern.
Shadowlist
Consumer- This week’s important retail #’s got off to a good start with the retail SP index closing on all time highs as expectations are coming in pretty good so far and more M&A activity is brewing. Notably here, FOSL produced a big earnings beat and exploded 13% to ~$106.
Earnings linked- This Q’s additions N, ARBA traded to fresh highs, last Q’s OPNT produced another good Q and traded up over $40. ROVI, which tripled here last year before being removed in February ’11, has fallen from mid 60’s to mid 40’s since. An excellent report AMC, not only because of a nice beat, but the deals it struck during Q inc. youtube, so it’s back on to the trading list.
Commodities- Despite a USD closing at day lows, the China import #’s were below expectations..coals, steels etc. traded down.