...data..data

The premise to start the week  ….”market’s ‘resiliency’ keeps on showing it’s hand as it hold ups on economic drivers withstanding depressing events”…” only hope is eco’ figures this week turn some heads away from European perpherials..”.    Slowly this is playing as the big media debate for the last 2 trading days has turned to‘Eco data vs. Contagion’  as the market bounces back to back after terrible openings.  The plan here is taking effect as focus is turning to eco data and away from European peripherals for the time being.   Today’s data points (Chi PMI, CConfidence) moved the market in the right direction and tomorrow should be no different with key data to hit (China PMI, US ISM).   The European peripheral situation will remain center stage, but if eco’ data continues to be strong (as expected), the headlines out of Europe will get muted somewhat.   A combination of European fears easing and v.good data, including euro figures and we may finally break out of this 30 point November range.   In reality, market needs to do it soon and gain some momentum as ‘important eco' data’ wind down after NFP on Friday into year end.

As far as the trading tape,  today was more of the same (see yesterday’s bolded comment).   As long as this trend keeps up, which we watch via Shadowlist, the market will hold up and you shouldn’t fall into ‘panicked’ selling because the market slides 160 and 110 points as has been the case last 2 days.   There was some negative noise (liquidation) about techs/momo/internets trading patterns (FFIV, CRM, PCLN, AMZN  types), but viewing it as a (month end/holiday end sell on news) phenomenon more than anything at this point as the selling wasn’t really aggressive.   Still, despite a negative day, we had some good individual stocks action off our list with APKT, KH, TFM  putting in NCH’s with >6% gains.

Trichet's tricks

The overwhelming theme underneath today’s impressive market recovery was not discussed in 99% of the market commentary you’d come across this week and thus was a ‘shock and awe’ to most.  What we’re talking is the lead you had at DJIM…. “Now, the ECB’s meeting (Thurs.) comes into ‘big’ focus (exit strategy speak)….. only hope is eco’ figures this week turn some heads away from European perpherials and/or ECB provides some relief.”.

So, besides more v.good “economic data drivers” in China PMI, US ADP/ISM, GS raising GDP#’s, Germany retail, the market got some’ relief’ from the ECB in the way of ‘hints for surprises’ for Thursday morning on ‘exit strategy’ to contain the contagion.  Simply, the market mover was ECB’s “Trichet’s trick” hinting that the ECB’s bond purchase program could see significant expansion and warned markets not to underestimate Europe’s determination to resolve the eurozone crisis!.  Basically, ECB won’t be aggressive with policy exit strategy given the growing debt stress, but let’s just hope the market is not over the top (exaggerating) in thinking there will be something radical in Trichet’s one hour pre market massaging of the stressful markets and thus end up being disappointed.  If it’s only a soothing massage/delay of exit and not a specific policy change (big bond purchase) that may occur.  Simply, fingers crossed ECB live up to expectaions now.

In all, an impressive broad market move above the late November range.  Yesterday’s note on breaking 30 point late November range came sooner than thought, but we’ll definitely take the effort and hope the market builds momentum now as important eco’ data winds down.   As far as Shadowlist, it was quite funny seeing yesterday’s noted NCH’s APKT, KH, TFM on top again with gains of another >7% intraday.

..." I'm out of the office..."

An incremental move over the 1246/1248 SPX zone, but, hardly a rejuvenated move as signs of fatigue still preside from last week.  

Nonetheless,  the December year end momentum continues on the back of preserving gains, no broad conviction, no buyers or sellers as “I’m out of the office…” auro-email replies gather steam across trading desks.   It didn’t look too good early as the day’s first attempt at zone failed with notable weakness in this year’s winners coming again…eg. BIDU PCLN,  it was good to see another zone afternoon attempt and many of the outperformers come nicely off the low’s.   Still, as discussed days ago,  money flow is going into laggards.    The best midday action >5% off our Shadowlist were from a couple of late season call-ups in TFM, QLIK,  recently it was HOLI/LIFE  that broke out nicely before profit takers came in quickly.  This exemplifies the type of tape we’re dealing with.  If you’re not “I’m out of the office ..” type, you are dealing with a market with no rhyme as on any given day a different stock will make a move. You might as well throw darts at the Shadowlist to try to stuff the stockings (account balances) some more.