One man show

Heading into Friday’s trade and a week later, the market is still grabbling with the April-August trendline around ~1108.   The simple reason of no breakout was showcased again today as it’s  a ‘one man show’ with only the financials (bank index >2%)amongst vital leadership groups doing anything.   We’ve already shot down the Semi’s here (NSM tonight is another sign), so it’s up to industrials, materials.   It may take China macro data coming up to get these groups going.   The market looked good today, but a capital DB  raise report at 1pm knocked out the chance of closing above the April-Aug trendline.   The way media hyped this was as if this came out nowhere, but as posted here following report,  some European banks coming to the market for cash is an ‘expectation’ ahead of Sunday’s Basel decision on capital standards for banks.   The initial sell off looked like investors were thinking this will spread to what are ’strong’ capitalized US peers.  This is highly unlikely, you can see this as the US financials continued to trade well and the market rebounded back to 1107 after some digestion of the news by the market.

Overall,  the equity market is at the trendline, positive for the week and the TSY is at 2.75%,  so stocks are still better to buy.