Today started with 165 k ESZ and 700 SPZ traded on Globex, ESZ trading range was 1675.25 – 1667.50. Thursday’s regular trading hours (RTH’s), SPZ pit session trading range was 1663.50 – 1684.00 before settling at 1669.70, down 13.4 handles. During the premarket there was a fair amount of hopefully optimistic chatter of a deal materializing out of Washington this weekend as we entered day four of the partial shutdown showdown… pitting President Obama’s comment — it is different this time — versus Boehner saying he will not allow the U.S. to default. Meanwhile, the rest of us have to listen to the partisan leakage through the media that leads to leaving many traders and investors on the sidelines – for fear of getting run over – one way or the other. Similar to the FOMC’s decision not to taper surprise shock and awe! So far, aside from the pullback, 3.7% decline from the all-time (FOMC sugar buzz) record high print two weeks ago, the markets are dealing with the dysfunctional politics quite well during the shutdown.
As I think about the government shutdown, the looming debt ceiling deadline and the impact on the global economy as well as corporate earnings and their guidance – I have to think, this is the best our leaders can do? Today’s edition of the political combatants was not much different than that of the last few months, except the grandstanding is on a larger global scale. It reminds me of a rhetorical question. It is usually defined as any question asked for a purpose other than to obtain the information the question asks. For example, “Why are they so stupid?”
Today’s December S&P 500 (SPZ) pit session opened 2.5 handles higher at 1672.00-1672.70 and traded a low of 1670.40 before grinding up to 1683.80 throughout the morning, but still on track for second straight losing week. We wallowed away the morning by listening to Fed governors’ speeches along with the media reports of the latest political partisan leaks out of Washington, and of course that was followed up by the horses’ mouths themselves. Think jackasses…
This is a marvelous technician in the chat room sharing some of his thoughts and work in his own words > william_blount (08:17) ROUNDIES are on the tens – 1630, 1640, 1650, 60, 70, 80, 90… his current SPOTS are 1657, 1664, 67, 73, 77, 81.5!!, 1689. Weekly schmivet 1689.5 — ALL FUTURES PRICES — the old Ben 1685.25…the new Ben 1695.75. This is your weekend scrolling exercise: 1 min bar chart with 2 min line on close overlay WITH the TECH ANALYSIS CRAP OF YOUR CHOICE and LOOK AT THOSE PRICES just given for trade turns within 2 handles that MATCH YOUR CRAP.
The afternoon session held above 1681 area, begrudgingly trading sideways to higher into the close, trading an intraday high of 1685.50. The SPZ was trading in the 1674 area at 2:00 in light volume. The SPZ was trading in the 1685 area when the early look of the closing imbalance showed (14:00) MiM – MrTopStep Imbalance Meter showing 90%, $398M to sell side – followed by a reading of 90%, $596M for sale at 2:30 with only 380M volume at the [NYSE]. At 2:47 the SPZ was trading in the 1682.50 area when the imbalance showed a modest $200M to sell. The cash close traded 1684 area before settling at 1684.80, up 15.1 handles. Last Friday’s settlement was 1686.40
This coming week we have [AA] officially kick off earnings season and the FOMC minutes, assuming they are released. There are only a handful of independent economic reports that will be posted due to the shutdown.
Companies Rush to Lower Earnings Bar: A Record Number of Firms Are Giving Negative Guidance Ahead of Third-Quarter Earnings Season, but That May Not Bode Poorly for Stocks on Its Own — You’ve been warned. http://on.wsj.com/18TWTOK
The bulls are chatting up the “pain trade” — a number of fund managers missed out on the summer rally and as a result are lagging the broader indices. The longer prices stay at present levels, the greater the impetus for managers to “chase” stocks will become. This could cause a virtuous cycle whereby higher prices beget higher prices. *WSJ from 2007 http://on.wsj.com/Opy8hQ