Three-peat

SPX off 10pts from day high...

Seems everyone is looking forward to '11 and ignoring the last few weeks of ’10.  This includes traders/investors who have no conviction for further gains and instead take ’10 gains slowly off the table.  Included are the tier 1 firms raising GDP#/SPX projections for ’11, who can move markets on their own machines now, but are not.  Once again early morning trade was a 3’peat this week and gave an oppy’ to ‘time out’ higher near 1246/47SPX zone. This time the market didn’t’ wait till 3pm to selloff and the first .5% decline in December ensued. 

The ‘symbol’ of expectations for ’11 is today’s TSY yield spiking above 3.50% (even with a high USD), which is getting all the ‘awe’ in the market.   You can trade individual stocks here, the general market via ES/SPY or even if things such TSY’s (TBT ) by Journal commentary.   Some like to point to the negative reason for the TSY fall as far as inflation etc,  but,  as it was pointed out here weeks ago….resetting asset allocation is happening ( see equity money flows from this weekend’s Journal)

As far as 3’peat and why DJIM was ‘defensive’ until 2 things change ( broad market ‘R’ and momo leaders selling), today’s action didn’t clear anything up.    The SPX didn’t even make it to “R” 1246/47 and yes, the momo’ names stopped falling for the most part, but there was no sign of buying either or they wouldn’t have closed flat on the day.   So, nothing settled as both issues weigh on any broad market progress.  Yesterday, networking stock, APKT joined the ‘winners’ selling fray, today it was a China internet, BIDU off 8pts from day's high.   As said heading into the trading day, it seems day after day.. more and more earnings winners take a hit on any given day, following in the footsteps of the really big momentum winners, NFLX PCLN FFIV CRM  peaking out.

In all, a few important earnings Thursday as FDX gives signs into holiday spending and a few tech’s are on deck (also Initial claims).  If, very positive reports, the current landscape may change, but even good 'eco data couldn’t do it today, so who knows.  Like today, DJIM’s JOYG  had a nice day post earnings, but everything else in the market was relatively flat, so staying selective and not overloaded is key in this ‘time out’.  It’s nothing more than digestion (pause) at this point, but realize, the whole ride in November from SPX1227 to 1173 was also digestion before the December ride back up.   Simply, there is more concern about conserving the latest rally gains than trying to milk more out this market at this juncture.  That’s all...