Up 100 handles, 6% in last 7 sessions – what’s your next trick, Mr. Spoo? Buyer’s remorse? Not yet, but the back and fill is just around the corner. With the skewed jobs data coming out on Tuesday, followed by the latest global PMI data starting Wednesday night – a logical person could assume there will be some. Is that too much to ask for, profit-taking in front of the pending news? Especially considering the record run and the 6% gains over the last several days. Oh, what a relief it is…as the equities continued to step higher, a series of higher highs and higher lows while sweating out the Washington debt ceiling circus over the last several days and the relief that has followed. The S&P 500 December contract clawed its way back to and now well beyond the no-tapering sugar buzz high following the Sept. 18 FOMC decision, leaving the S&P cash market fractionally shy of its peak by mid-session. Guessing there are plenty that are thinking the tapering is further away than closer. QE 4EVAH!
Notable corporate earnings: All things [GOOG]! Converts $1000 to support… and is up over 40% year-to-date!
william_blount (07:35) feeling more like 1999 everyday! Only now, instead of leveraging our lives on the backs of 26 year olds (how much common sense did that exhibit?), we are now leveraging our lives on the backs of Ivy League, Ivory Tower geniuses (how much common sense does that exhibit?).
From [GS]: EUR The bounce in the dollar overnight was short lived as the trend of dollar weakness has continued with leveraged demand for the euro propping the pair up ahead of support at 1.3640. We have held on to a small portion of our euro long believing that there is little reason for the dollar to rally significantly ahead of Tuesday’s NFP given the increasingly popular idea that the FOMC won’t be able to taper until March and continued rhetoric out of China demanding a move away from the dollar. But we are also cognizant that the market will have plenty of wood to chop ahead of the YTD high of 1.3711, and want to have the ability to buy dips should we get the opportunity. Given the speed of the rally and the number of longs that stopped out below 1.35, I think the market is in “buy on dips” mode towards 1.3600 with our order book holding stops above 1.3720 before barrier interest at 1.3750. Spot reference: 1.3675 View from: Matt Lee
Today started with 225k ESZ and 1k SPZ traded on Globex, ESZ trading range was 1734.75 – 1727.00. Thursday’s regular trading hours (RTH’s), SPZ pit session trading range was 1728.70 – 1708.70 before settling at 1727.80, up 14.6 handles. Today’s open outcry pit session gapped 6 handles higher to open at 1734.20 – 1733.80 and traded an early low of 1730.50 before grinding up to 1736.00 and then bouncing sideways to slightly higher after holding the retest, double bottom at 1730.50 before printing a new record high of 1740.30 in the afternoon session.
The Dow [DJIA] was lagging again today as the broader S&P 500, Nasdaq and the Russell 2000 were providing the muscle. And what muscles they were, rippling throughout the equity complex as even the DJIA begrudgingly followed the crowd as the S&P and Russell extended their record runs. This morning, the [VIX], fear gauge, was down another 7%, continuing its sharp decline from its recent high of 21.34 high on 10/9 to today’s low, 12.34.
Some have asked to elaborate on the recent complacency in the equity markets and its relationship to the declining VIX. Well, the Washington debt ceiling debacle is no longer the opening tags/teasers for the fear-mongering media – as the issue has been satisfied for now by pushing it deeper into the calendar. Most believe our elected politicians will not allow such a spectacle to metastatize again by the time the debt ceiling is resolved early next year. However, there was/is some damage from the Washington showdown and the partial shutdown. Our trading partners and even those that are not our partners saw our elected leadership as the egomaniacs they are. Some of the immediate fallout from the circus? For the fifth consecutive day the yuan hit a record high today against the dollar, which is eroding towards the year low of 79.613 as the Chinese continue their campaign to push away from the dollar. All the while, on the bright side, the European community, Asian and U.S. economies continue to plug along showing signs of global growth, albeit with some potholes of differing sizes lining the street to recovery. Also, the premium pumped into the crude market and the prices at the pump have softened sharply following the diffusion of the Syrian/Russian threat. Lastly, we are into the heart of the 3rd quarter earnings season and the lowered expectations have set an easier hurdle to convert. So, far there have been a few notable disappointments, but as a whole the season is off to a decent start as the peak of the earnings hit next week – along with some of those delayed, thus possibly shutdown-skewed, economic reports that have built up.
william_blount (08:58) if we do not get back below 1729 spot before 10:45a.m.CT, then a good tell of continuation of trend up is in place and that would make the pop of the upper ascending a cinch. Well, if you read the above commentary you know the 1730.50 held … redliontrader (10:35) Winding up again – NYSE A/D 2.26:1 – [Rut] leading 2.7:1 – 409 NYSE 52 week highs. From there, the equities continued to slowly and quietly squeeze higher on the wonderful Friday as a good number of the trading community hit the exits early as the expiration has lost its bluster over the recent years, but that did not derail the SPZ from printing a new record high of 1740.30 during a quiet afternoon session.
The SPZ was trading in the 1737 area when the early look of the closing imbalance showed (14:00) MiM – MrTopStep Imbalance Meter at 78%, $96M to the buy side, followed by a jump at (14:20) 61%, $223M then at (14:40) 64%, $366M to the buy side. At 2:47 the SPZ was trading 1737 area when the imbalance flipped to an opex-skewed, modest $280M to the sell side. The cash close traded 1738.80 area before settling at 1736.50, up 8.7 handles as earnings are checking in mixed to better along with some notable disappointments, as well as some notable toppers. Last Friday’s settlement was 1699.00. The S&P futures have closed higher 6 out of the last 7 sessions for a total gain of +6%!
**Updated BLS release schedule: http://www.bls.gov/bls/updated_release_schedule.htm
The SEPTEMBER JOBS REPORT WILL BE RELEASED ON TUESDAY, OCT. 22.
Monday’s econ data: Existing home sales for September.
Earnings pre-market: [CE], [CHKP], [GCI], [HAL], [HAS], [LII], [MAN], [MCD], [SAP], [VFC].