Another lackluster, low volume trading day, but a late day rally did help the major indicies post modest gains by the close in any event.
In today's data releases, pending home sales for January fell 7.6% vs an expected 1.0% monthly increase. January factory orders were up 1.7%, which was close to what was expected. Fourth quarter nonfarm productivity hit 6.9%, but was not much higher than the expected 6.3% target, and finally unit labor costs dropped 5.9% vs and expected 4.5%.
The dollar moved higher today gaining 0.7%, while the VIX dropped yet again, hitting 18.72 at the close. This after being higher most of the day.
It's all about Friday's non-farm payrolls report now, which is being blamed in large measure for the market's seeming lack of either buying or selling conviction.
Today's charts:
Still toppy, and both still on a buy.
Not so with NAHL and NYHL. Both flipped to sells today.
TRIN and TRINQ remain on a buy.
BPCOMPQ higher still. This is a trend indicator and is currently bullish.
Our Top 15 got more defensive going into tomorrow's action. They do have a 40% stock exposure, but a 20% bonds reading may be giving us at least some clue.
So here's my read. I think the market is finally ready to make a move as the much anticipated nonfarms payroll data comes out tomorrow. That will probably be the catalyst to drive this market in one direction or the other, possibly in a big way. Trader's Talk sentiment survey for tomorrow is showing 50% fully long and 0% fully short bears. Sentiment is 58.3% bulls and 16.67% bears. This is an early read and could change by the morning. Also, these are day-traders, so they could be right for at least an intra-day trade. But sentiment is a fade right now, so while we may rally initially, don't expect it to last. VIX is a sell. NAMO and NYMO are still looking toppy, but BPCOMPQ continues to indicate that the trend is up.
What this all tells me is look for very short term weakness. That doesn't mean we can't make a big move higher to start the trading day tomorrow, but I suspect the selling will kick in intraday if not immediately. And the selling could last until Monday given that it's almost a given anymore that Monday's are green.
But I don't think we sell off enough to trigger a Seven Sentinels sell signal. So I am inclined to think a buying opportunity is at hand. The signals support very short term selling, but nothing to suggest rolling over at this point. Not with BPCOMPQ ramping up. I'm just not seeing a sell signal set-up here.
Our Top 15 holding 20% bonds and 40% cash tells me much the same thing. Bonds should spike upward in a sell-off and some of those traders are positioned for that. And 40% cash is ready to be deployed on a good dip. I like their collective position right now.
It's going to be an interesting day tomorrow. Good luck on your trading decisions and see you tomorrow.
In today's data releases, pending home sales for January fell 7.6% vs an expected 1.0% monthly increase. January factory orders were up 1.7%, which was close to what was expected. Fourth quarter nonfarm productivity hit 6.9%, but was not much higher than the expected 6.3% target, and finally unit labor costs dropped 5.9% vs and expected 4.5%.
The dollar moved higher today gaining 0.7%, while the VIX dropped yet again, hitting 18.72 at the close. This after being higher most of the day.
It's all about Friday's non-farm payrolls report now, which is being blamed in large measure for the market's seeming lack of either buying or selling conviction.
Today's charts:
Still toppy, and both still on a buy.
Not so with NAHL and NYHL. Both flipped to sells today.
TRIN and TRINQ remain on a buy.
BPCOMPQ higher still. This is a trend indicator and is currently bullish.
Our Top 15 got more defensive going into tomorrow's action. They do have a 40% stock exposure, but a 20% bonds reading may be giving us at least some clue.
So here's my read. I think the market is finally ready to make a move as the much anticipated nonfarms payroll data comes out tomorrow. That will probably be the catalyst to drive this market in one direction or the other, possibly in a big way. Trader's Talk sentiment survey for tomorrow is showing 50% fully long and 0% fully short bears. Sentiment is 58.3% bulls and 16.67% bears. This is an early read and could change by the morning. Also, these are day-traders, so they could be right for at least an intra-day trade. But sentiment is a fade right now, so while we may rally initially, don't expect it to last. VIX is a sell. NAMO and NYMO are still looking toppy, but BPCOMPQ continues to indicate that the trend is up.
What this all tells me is look for very short term weakness. That doesn't mean we can't make a big move higher to start the trading day tomorrow, but I suspect the selling will kick in intraday if not immediately. And the selling could last until Monday given that it's almost a given anymore that Monday's are green.
But I don't think we sell off enough to trigger a Seven Sentinels sell signal. So I am inclined to think a buying opportunity is at hand. The signals support very short term selling, but nothing to suggest rolling over at this point. Not with BPCOMPQ ramping up. I'm just not seeing a sell signal set-up here.
Our Top 15 holding 20% bonds and 40% cash tells me much the same thing. Bonds should spike upward in a sell-off and some of those traders are positioned for that. And 40% cash is ready to be deployed on a good dip. I like their collective position right now.
It's going to be an interesting day tomorrow. Good luck on your trading decisions and see you tomorrow.
