..lots of moving parts ahead
Tuesday, September 28, 2010 at 05:15AM Although, today’s quite big SPX sell off was similar to Thursday’s (no worthy fundamental news) , the odds are damn good, we’re not going to have the same ‘Friday’ gap/rally result. Why?. Firstly, it wasn’t technically driven and secondly, the timing of it into a busy events Q end week. As noted heading into the week, the expectation of a Monday buying spree by managers and/or more window dressing will probably not materialize this week. Maybe, today’s sell off had something to do with it as expectations were not being fulfilled into the afternoon. Even 'Zerohedge', the National Enquirer of the marketplace had a bit on this …“In a surprising, and at the same time completely expected reversal, all those who thought that Monday's always close due to mutual fund inflows were stunned to see a red close“. Part of this quote goes on to say it was because this was not a POMO day (fed buying day) and that Tuesday is and likely to be a green day. Well, we don’t think this argument, even if probably a little sarcastic, will not necessarily hold as didn’t the usual Monday green day premise.
As far as broad action, the commodity linked stocks of choice are doing absolutely nothing after the dovish USD weakening FOMC statement, which is raising more concern day after day. Add the underperforming Financials and we have little reason to chase on the upside with these 2 groups idling. Excluding BIDU, ROVI , we did have other decent nch’s and/or multi month breakouts in the consumer group off our Shadowlist..LVS, GMCR, BID , the market isn’t going to get excited about what we like to trade.
A big week in IPO`s this week for the markets, most have priced well, but even if they do really well once open to the public this might be offset by a busy Thursday-Friday in Europe with ECB-banks refinancing coming up along with detailed news ahead on Irish banks. Some jittery moments possibly ahead late in the week, leaving the market direction-less into it.