As we come to the end of a very successful September (6 tradings left) with many technical targets achieved and/or brushed with 1130, 1140, 1150 SPX + notable Macro data /FOMC out of the way, the market has only a few things to do!. Most of it consists of taking a breather, rest period, back filling, consolidating, digestion, sideways action …..'Whatever', you want to call it, it’s happening since SPX1049 as the market works off some of September’s ‘overbought’ gains (SP~8%, Nazzy ~11%, Dow ~7% and investor ‘bullish’ sentiment.
Most of the workout today occurred in the techs (ADBE, PMCS-these warnings are nothing new, we’ve said to expect more in this group into EPS season) and Financials off >1%. This reaction in tech is really not due to these warnings being a surprise, but the fact it’s the best % September group and these news bits become an ‘excuse’ to take profits. Considering the big ‘overweight’ in these 2 sectors on the SP, today’s broad market performance was not bad as selling pressure is seemingly contained.
DJIM can hardly complain as Tuesday’s alerts to RIMM in low 46’s, hit $49 today and NFLX exploded ~10pts from alert..(” NFLX looks to copycat the movers from yesterday with NCH not far away.”)… Not bad to catch a few of the best movers since the market hasn’t done anything to the upside since. RIMM should still be in play till next weeks developers conference (tablet intro?) and with AAPL at potential resistance levels, a pair trade may be conceived here.
Performance anxiety over these September numbers should be enough to keep this market steady as managers come to ‘window dressing’ time. Still, it’s not a bad idea to take off some exposure and be more selective as upside risk fades here late September with potential upside catalysts not on the agenda. Post FOMC and today, commodity linked stocks little reaction to weaker USD was enough reason to reduce exposure (alert at 1040SPX/10am) as the usual trade had not began not materialize. You could see the expectatation and spikes in WLT X CLF charts at the open and the tops put in early and subsequent 3pt drops in X /WLT by close. If you're 0 for 3 leading off the day..1.tech, 2.financial, 3.commod's as today, there is no (DH)Designated Hitter to clean up.