Tuesday, September 14, 2010

Stocks Higher into Final Hour on Tech/Retail Sector Optimism, Buyout Speculation, Short-Covering


Broad Market Tone:

  • Advance/Decline Line: About Even
  • Sector Performance: Most Sectors Rising
  • Volume: About Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • VIX 21.08 -.57%
  • ISE Sentiment Index 148.0 +33.33%
  • Total Put/Call .88 +10.0%
  • NYSE Arms .98 +91.16%
Credit Investor Angst:
  • North American Investment Grade CDS Index 103.19 bps +1.03%
  • European Financial Sector CDS Index 107.50 bps +.60%
  • Western Europe Sovereign Debt CDS Index 152.79 bps +2.42%
  • Emerging Market CDS Index 243.75 bps +.56%
  • 2-Year Swap Spread 18.0 -2 bps
  • TED Spread 15.0 -1 bp
Economic Gauges:
  • 3-Month T-Bill Yield .14% +1 bp
  • Yield Curve 217.0 -4 bps
  • China Import Iron Ore Spot $139.20/Metric Tonne -.07%
  • Citi US Economic Surprise Index -9.60 +5.9 points
  • 10-Year TIPS Spread 1.78% -6 bps
Overseas Futures:
  • Nikkei Futures: Indicating +1 open in Japan
  • DAX Futures: Indicating +6 open in Germany
Portfolio:
  • Higher: On gains in my Tech, Retail and Medical long positions
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long
BOTTOM LINE: Today's overall market action is bullish as the S&P 500 builds modestly on recent gains and remains slightly above its 200-day moving average. On the positive side, Airline, Retail, Drug, Gold, Semi, Disk Drive, Networking, Alt Energy, Computer and Medical shares are especially strong, rising 1.0%+. Tech shares are outperforming. The S&P GSCI Ag Spot Index is rising another +.82%. Weekly retail sales rose +2.9% this week versus a +3.0% increase the prior week. The European Investment Grade CDS Index is falling another -1.83% to 95.17 bps. Moreover, the Greece sovereign cds is dropping -.72% to 900.33 bps and the UK sovereign cds is falling -7.47% to 65.77 bps. On the negative side, Education, Bank and Oil Service shares are under pressure, falling more than 1.0%. (XLF) has been a bit heavy throughout the day, but isn't giving back too much of yesterday's gain. The 10-Year Yield is falling -9 bps to 2.66%, which is negative. Gold is breaking out to a new record high. Shanghai copper inventories are up +18.32% over the last 5 days. The Spain sovereign cds is rising +4.79% to 230.47 bps, the Portugal sovereign cds is rising +3.87% to 332.33 bps and the Ireland sovereign cds is gaining +4.74% to 379.36 bps. The Citi European Economic Surprise Index is down -24.10 points today to +79.90. This index is down from a reading of +117.20 about 2 weeks ago. The S&P 500 remains near a critical technical level. I am still closely monitoring my technical gauges for any signs of developing weakness, given the trading range we have be trapped in for some time and some developing red flags. I expect US stocks to trade mixed-to-higher into the close from current levels on tech/retail sector optimism, short-covering, buyout speculation and technical buying.

1 comment:

Maestro said...

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