Economic news was better today as personal income rose 0.4%, but spending was only up 0.2% and below expectations. Jobless claims were basically in line with expectations. The lackluster economic data is putting a damper on the expectations for a demand in oil usage in the US due to faster growth. crude oil move back below the $106 mark again and natural gas continues to struggle. Alternative energy continue to move back towards the previous highs. All worth our attention moving forward.
The market started lower, but again the buyers stepped in to push the indexes back towards even on the day. Some indexes responded faster than others to the selling, but still lacking in the leadership department on the move. I hate to harp on the need to be patient here and not chase things on intrday moves as they may reverse tomorrow. One day at a time is all we are willing to do for now. It will clarify again, but for now will to watch and see how it unfolds.
Notes to Note:
- Lack of volatility is back in the headlines, but watching a pot water waiting for it to boil won’t make it happen. If investors are complacent about the current environment take it for what it is and find the opportunities versus wishing for one to happen.
- Downside ETFs worth watching going forward to bounce off support or break lower:
- GREK – Greece broke support and is sitting on the 200 DMA and a break would open a possible test of the May low. Bounce would take some money flow as the there is plenty of overhead to deal with.
- FDD Select Dividend index is sitting on the 50 DMA and testing support at the $15 level.
- PBJ – Food & Beverage index is testing support on a double top at $21.21. break would retest the May lows. The consumer staples (XLP) stocks are the challenge in the sector short term.
- INDL – India Bull 3X is sitting on support at the $88.50 level. A descending triangle pattern at the highs. Negative break brings the 50 DMA into play on the downside.
- Interest rates on the thirty-year bond fell again on Thursday to 3.34% and TLT rallied again. No fear to speak of in the broad markets, but still money flow to safety assets. Watching this move short term. Ten year is at 2.52% and testing lower.
- Oil prices pushed lower to $105.70 and getting an assist from the US economic data and projections of lower demand usage in the US. Watching to see if a downside trend takes root.
- China catches support after two big days of selling. As we stated yesterday to see if it holds here and bounces or do we continue the downside trek… bounce it is off the 200 DMA. Offering more stimulus brings buyers back to the table.
- Natural gas fell on the projections of slowing consumption in the US as the economy shows weaker data going forward. Chart below show the Natural Gas ETF as bounced back to breakout level at $3.10.
Solid day for the markets to recover from the modest selling and keep the upside in play. Still plenty of work to do if the buyers are going to maintain control of the process. We again focus on taking it one day at a time and maintaining our discipline relative to the objective.