Today started with 351k ESU and 1.5k SPU traded on Globex, trading range was 1666.50 – 1681.70. Wednesday’s regular trading hours (RTH’s), pit session trading range was 1681.20 – 1692.50 before settling at 1682.00, down 8.8 handles. Yesterday the equities went soft after retailer Macy’s [M] fell 5% on “some questions regarding the health of the American consumer in a sluggish economy.” redliontrader posted late yesterday (14:54) -2:1 on the NYSE A/D line – that is not healthy…Zweig should be down tomorrow.”
[CSCO] followed by [INTC] downgrade [WMT] disappoint this morning as traders are keying on the consumer health. The global weakness started during the last hour of the U.S. trade yesterday and swept through the foreign markets with the Nikkei closing down over 2% and the DAX gapping lower on the open, then closing down .75%. Middle East concerns continue to support the crude market while shaking out some of the risk on latecomers. A bright spot of late has been the European economic data teetering on the breakout of the ongoing recession there; however, the U.S. data remains tepid at best. Today’s busy economic calendar did little to help offset the profit taking…CPI, jobless claims, Empire manufacturing, industrial production and Bloomberg’s consumer sentiment/comfort were in-line to moderately lower.
Today’s pit hours gapped 14 handles lower to 1669.00 – 1667.50 marking the intraday high before eroding to 1657.00, down 1.5%. For the most part, what could go wrong for the bulls did go wrong. Post close yesterday [CSCO] disappointed followed by [WMT] disappointing again today adding to their 1st qtr miss. WMT cuts guidance, blaming weak consumer spending, payroll tax and FX markets – “retail environment remains challenging in the U.S. and our international markets, as customers are cautious in their spending.” Traders as well as investors are watching the money flow as profit taking or risk off in the U.S. could lead to European inflows, rotation as investors bet on a continuation of their upside potential. Philly Fed checked in at 9.3 vs exp 15.0 and prior 19.8…
The NAHB housing index was a lonely bright spot [XHB], up almost .5% midday. Half of All Homes Are Being Purchased With Cash http://on.wsj.com/16Nn4Ux william_blount offered: that is because people who used to qualify for homes when prices were rising to the sky are no longer able to get loans AND REGARDLESS OF WHAT THE BLEEDING HEARST SAY, lending those pople in the first place was as stupid as betting the farm on a bunch of 26 year olds in 1998-2000 bubble. Vikram_Rangala (09:52) Stupid, yes, Bill, unless you could make a pile of money and leave the cleanup to the taxpayers. william_blount (09:53) the POLITICAL PARASITES FORCED THE RELAXATION… Vikram_Rangala (09:53) You and I call it that. Lloyd Blankfein calls it “doing God’s work.”
Anyway, the SPU traded a low of 1657.00 at 9:12CT and clawed its way back to 1665 area by 11:31 before fading back to 1657.50 at 12:16. (12:26) Timothy Haefke @FuturesTNT $ES_F – missed objective price of 1666.00, high of 1665.25. Rotating with big chances of seeing new lows. Three week low of 1653.50 next.$ – unless we trade back above 1661.50 area. Well, the SPU traded a lower high of 1661.50 at 12:46 before trading a new intraday low of 1656.00 at 1:11 and bouncing back to 1662.50 at 1:37 in light afternoon volume – although the e-mini had an above avg 1.9M volume on the day. The equities showed they could bounce ever so slightly today, but at the same time they also showed they could not hold any of those 4-8 handle bounces. Going into the closing imbalance the SPU was trading off a recent low of 1656.50 and was trading 1658.50 when the early look showed $250M net to sell. Going into the cash close the imbalance got paired off showing a very small $29M to the sell side. The cash close traded 1658.70 area before trading a new intraday low of 1655.50 in the closing range and settling at 1655.70, down 26.3 handles on the day.
Jack’s interview on MrTS site … excellent! http://mrtopstep.com/2013/08/the-next-big-trade-will-be-in-bonds-in-fall-2013/