In Asia, 9 of 11 markets quoted closed lower (Shanghai Comp. +0.34%, Hang Seng -0.59%, Nikkei -0.69%). In Europe 12 out of 12 markets were trading lower (DAX -1.57%, FTSE -0.54%). Morning headline: US Targets Syria – Yes, Syria is in the news, but new record lows in the rupee and a 3% fall in the SENSEX was weighing on futures and global markets, as it appears we’re not done with this latest round of emerging market turmoil. With regards to Syria, there’s nothing new out overnight, but expectations for some form of military action are rising quickly, pushing gold, bonds and oil modestly higher. *Hagel: U.S. military ready to act IMMEDIATELY if asked.
Don’t forget that even if the Syrian headlines abate (which are more now about how the Russians react, not if there will be a military event)…we still have the U.S. jobs report on Sept. 6, Congress is back in session to coldly and probably quite publicly um, negotiate the debt ceiling starting Sept. 9, FOMC – how much to taper by or not on Sept. 18 and German elections are Sept. 22. Note: The U.S. government comes back from vacation on Sept. 9 for both House and Senate. That is 9 legislative days before the end of the fiscal year and before the current spending authority expires. Without action (including a month-long emergency extension) shutdown on Oct. 1.
Roger_Volz (05:30) No new measures mentioned from the Turkish CB Gov. as such TRY continues to weaken spot now at a record high print of 2.0194…Rupee crashes to record low of 65.93, Sensex sinks 500 points … Britain drawing up contingency plans for military action over alleged chemical attack in Syria – Downing Street … German Ifo business climate rises to 16-month high of 107.5. 10yr yield 2.76%. Low volume risk off has positive back burner divergences with German Ifo….DAX still not resolved lateral pattern; HK July exports +10.6% vs exp 3.5% has Shanghai in green.
Adding to the premarket weakness… WASHINGTON — President Obama won’t bargain with GOP lawmakers over increasing the debt limit, Treasury Secretary Jack Lew said Tuesday. The warning from Lew came one day after he formally notified House Speaker John Boehner in a letter that the federal government will hit the $16.7 trillion debt limit in mid-October. http://usat.ly/18ik9Cx
Roger_Volz (07:10) CL running stops > 107.65 to 108.32; major 108.90… 109.50-109.77 first channel top. Sam_E (07:58) both sides getting what they wanted the bears dreamed of (previously noted) 1666 to reshort and the bulls dreamed of (previously noted) 1636 to re long. william_blount (07:59) POSTED SPOTS–1667, 1637… Sam_E (07:59) your work is priceless my good friend. william_blount (08:00) actually though –1642.5 IS THE MORE IMPORTANT SPOT as it determines the over under directional. Sam_E (08:00) nq HAS to touch 3808 or 3075. william_blount (08:02) 1632.5 SPOT– the 1 handle overshoot WAS NOISE.
Roger_S (07:50) GC near 1420 area resistance. Next stop the 1480s? Roger_V (07:52) GC daily I have bunch working 1431-1437 tgt first OB.
Sam_E (08:03) cl 108.66 poses problems. technically, but honestly with the russian and american fleet sitting on top of each other this is a dangerous market to be short crude. technically this level cl i mentioned is the short. but with the two most powerful fleets in the world occupying the same real estate i dont have the balls for this one. accidents happen. the gamblers can take that one. stephen_c (08:11) Sam agreed! missle strike can come as early as thursday- private well placed sources rebels providing targets. cl was up over 3%.
Today started with an above average 350k ESU and 2k SPUs traded on Globex. The overnight SPU trading range was 1655.40 – 1636.00. Todays pit sesion opening range gapped 16 handles sharply lower to 1638.50 to 1638.70, traded an early low of 1638 before climbing to 1644.00 at 8:49 then retesting the opening range by 9:49, followed by a lower high of 1642 going into the European close. Choppy!
Case Shiller checked in a little lower at 2.2 vs exp of 2.3 with HOME PRICES RISing 12.1% VS YEAR AGO and consumer confidence checked in at 81.5 vs exp of 79.0, prior data revised up to 81.0 from 80.3.
william_blount (08:50) bulls fighting back – BUT accomplish nothing until back through the 1647 AND NEED the weekly pivot under them to confirm probable c OF (B) in motion — FIRST FOCB (fish or cut bait) — but bulls NEED the spill to be fixed at 1637.25 rth — and NEED TO GO TO THE 1647 minimum for the a.m. high
Kathy (09:11) ES pretty balanced, doing nice job of filling in globex imbalance between 1644.5 & 1637, these being key lvls to brk & hold, there are 2 gaps 1636.5 & 1635.75. Failure to get above 1644.5 to take care of that unfinished business implies bearish continuation. Harmonically, ideal bounce into 1646.25 to 1648 region, that’s where I’d stalk a short entry. Sam_Easley (09:16) bulls have their dream long at the lows (1636). that is to say their long to rescue the current pattern. technically if they lose the low its 1627 in very short order. but that does not kill the bulls. it just changes the count. i would think that if (when) they get it – it will be bought feverishly. the algos still have that number in their minds.
As the liquidation continued the afternoon session saw a slow, steady bleed, similar to an open wound, as the S&P 500 made a series of lower lows followed by lower highs. As the index stepped lower, the volume got lighter as once again traders left early. A low of 1626.80 printed at 2:34 as the e-mini was printing 1.9M contracts traded, above the recent average. Thanks for your help today Sam_E!!! Kathy (14:34) Sam’s awesome. Mose (14:35) I am buying you a pint of lightnin Sam.
The financials were the weakest of the sector SPDRs today [XLF] -2.5%, [BKX] -3%. The closing imbalance showed a small $27M net to the buy side. Sam_E (14:50) wounded yes but the bulls are not out of this ball game. Roger_S (14:50) Are you long ES and/or NQ now, Sam? Sam_E (14:51) both. the algos must make a bold move off this es to confirm. and es is not out of the woods just yet. the algos must bite on 1627. If they do not bite on 27 its 161675. The cash close traded 1628.50 area before settling at 1628.20, down 26 handles on the day.
The July durable goods report was pretty weak and the important details were worse than expected. The report adds some additional downside risk to 3rd qtr GDP. It is hard to imagine the Fed could get more hawkish following recent data, last Friday’s new homes data followed by soft durable goods data and the coming events…giving Sept. 6th a whole new outlook… as all eyes will be on the employment data in front of the FOMC announcement on 9/18.
A White House source says the president is likely to nominate (team player) Larry Summers to be the next Federal Reserve chairman, reports CNBC.
Sam_E yes i have a note on my screen that says in big bold letters. THE PIT IS REAL. EVERYTHING ELSE IS BS. there is a real difference between pit highs and lows and the ones on your chart. know the difference. the pit rules the roost.
the pit plays in the real world. globex is the dream world. We agree with Sam!