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Gap higher given Tax bill passing keeps near-term trend higher

gm - Sun eve Gap higher in Futures given Senate Tax bill pass still near levels hit last night around 6pm, a few ticks down from highs, but up 0.50% while DJIA futs up over 1%, and NASDAQ up relatively less at 0.37%.  Europe up over 1%, both Crude and Gold down fractionallly and bonds also showing mild losses, with TNX up to 2.388.. Overall while quite overbought, and showing signs of rampant Call buying and Demark Sell Setups while Technology has been waning, the broadening out of this rally has been a positive of late, with breadth and momentum improvement- Trend will be bullish until we see at least some evidence of prices turning down to multi-day lows-   CVS/AET deal valued at 69 billion one of the more discussed topics  this am, and early gainers in AET, SQ, OSTK, CIEN, RIOT, BGC, ZYNE, PXS, MARA while on downside-  NOK, AU, FNSR, SIG, SRAX-   -  Resistance for this am at 2661, then 2670-5, while PIVOT at 2633 today and then support way down at 2615

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Market regains some of early losses, but concerns, & uncertainty remains

Market having recovered 0.50% is a partial positive and we'll see the extent to which this can continue into the close.  Tech weakness along with the bond rally however remain negatives.  -   Breadth has recovered, but still a minor negative and industrials, Tech and Materials still down over 0.75%.. but we've seen Financials turn back positive after being down 1%.  and Telecom, Discretionary along with Energy  being positive.   Crude and Gold have given back some of early gains.. but Crude still higher above 58, up 1.25%.   OVerall,  S&P will need to regain 2650 to have conviction that this has played out.  and for now, this volatility still looks like something which could persist into early December

 

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Flynn developments cast uncertainty, & Equities turn lower

Into mid-day, we’ve seen a real rollercoaster, with Initial 1 to 1.5% declines in Equities now being recouped to a minor extent..   NASDAQ still lower by more than 1%.. and Bonds have rallied globally, with yields reversing much of the rally in the last few days, casting doubt on the breakout.   Gold had spiked over 1% which is now fading a bit, and now up 0.80%, higher by 10..  while CRUDE oil is up by nearly 2%.. up to 58.47

Sector-wise, we’re still seeing 3 sectors down more than 1% today..  Industrials, Technology, and Materials, while Financials WERE down more than 1% and have rallied a bit in the last 30 mins..

 

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Technology decline a likely headwind for Equities in early December

Last day of the week but the first day of December.  Trend bullish but stretched and upside should prove limited into early next week before at least a minor pullback-   For today- Minor losses in both US futures and in most of Europe while Asia has been largely mixed today- Bond yields have pulled back a bit after recent breakout, but little overall volatlity in WTI, nor Gold and Dollar higher just fractionally-  Markit Manufacturing PMI data due out at 945 and additional ISM data out at 10-   Overall, Trend has reached levels where further upside might prove difficult given combination of low Put/call data, Demark 9-13-9 patterns while both Financials and industrials have gotten stretched while Technology looks to be turning lower, down 5% on the week-  Resistance today near yesterday's highs 2658-9, then 2663-4, while on downside, overnight lows at 2631 should be important, then 2627-  Premkt gainers in FMI, SRAX, PLUG, NTNX, AMPE, SSC, AMBA, GROW, while on downside-  GCO, ULTA, LLNW, ZUMZ, GST, BIG, RAD, lower-   Let me know if you have any questions

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Breadth Negative as Stocks hitting new highs- Warning

30 min left.   S&P, DJIA and NASDAQ all at highs but NYSE breadth remains negative, More Declining than advancing stocks while Volume also heavier in DOWN vs UP stocks, which is extremely rare-  Healthcare, tech, Utilities, energy positive, while Financials, Telecom, Real estate, Industrials and Materials all down on the day-   Dollar moving back to highs of the week after the last few days of DXY consolidation, and EURO looks vulnerable to selloffs down to 1.14 vs USD-  Crude has spiked to levels that also are important in terms of resistance and a good spot for profit-taking, Technically after this recent rise.   Gold still negative and TY yields are down to 2.3346, suggesting additional downside next week, while 2s/10s curve has broken down to the lowest levels since 2007, undercutting 2016 lows in its flattening, which makes sense for this stage of the cycle-  Former Chip leaders INTC and NVDA both giving some indication of trying to peak out in the near-term and might serve as the catalyst for SOX to fall next week, leading Technology lower, as Financials follows the yield curve which has been steadily flattening-  Overall, trend in Stocks positive, but one should look into selling into this as stocks hit the 1-year anniversary of last year's lows, which this time around, have the potential to make a HIGH- Expect stocks peak out towards the half-way point of their 20-week cycle which has been dominant over the last couple years and should head down into mid-January 2018.  AAPL nearing its own cyclical peak based on relationships that have worked with this stock since 2015-   Have a nice weekend

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Treasury rise could prove problematic for Equities as Financials fall

Aead of this am's Jobs report.. 313k exptd... US Futures have rallied back from early losses.. while NASDAQ maintains above avg gains w/AAPL having beat handily last night-   Most of Europe mixed.  outside of Spain down by 1.4%.. and Asia largley positive (Japan closed)-   Not much volatilty this am in either WTI nor Gold and Dollar, TY also largely unchanged ahead of 830-  yields have steadily pulled back in recent days, so we'll see if today's report results in any acceleration or trend reversal-  Key developments in recent days include Financials jumping to multi-day highs.  most of Industrials bouncing yesterday as Aerospace/Defense makes a sharp relative gain along with many Rails  while Airlines still a big laggard and dropping to multi-day lows-   AAPL's gains causing premkt lift up to 174 so the early bias will be positive given both Tech gains and Financials.. but key resistance lies at 2585 and then 2590-2 with move back down UNDER 2560 needed for bearish stance-   Gainers today in ANET, SMI, S, ATVI, NTLA, JACK while on downside-  P, PACB, DATA, IMGN, AIG, RLGY, SAN, CBL

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VIX and SPX trending in similar direction is odd and likely soon reversed

Eco data beat across the board this am with Durable goods, Cap goods orders well above expectations-  bond yields have been trending sharply higher all morning with TNX back up over 2.40% and now at 2.45 which will give a lift again to Financials this am.  Both Gold and Oil mildly lower-  Overall Equity prices have gotten stretched up to the highs of the range and notable that Advance/decline has been trending lower in the last two weeks, while VIX has been moving HIGHER along with equities over the last few days, a very strange occurence that rarely occurs all that often.  the last times that came close (4 out of 5 days where VIX and SPX both trended higher in unison) were in Spring of 1999, November 2013 and then August of this year, each of which were followed by at least a minor dip--  Overall, today's minor Futures pullback not changing things too dramatically and will need a close under 2560 to have any sort of confidence of a larger correction- Key areas on upside at 2570-1, and 2558-60 on downside  -  Premkt movers for today-  QTNT, CAPR, VSAR, AKAM, OSTK, TYME, IRBT, WLL, NM, LL, NOC, GPRO, S, While on downside SVRA, CMG, AMD, SALT, EW, PFLT, QURE, DFS, and T-- Let me know if you have any questions

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Move to new Multi-day lows looks important as trend broken from late August

Little more than an hour into trading, we've seen a move by many indices and sectors to new multi-day lows-  SP Futures being under 2560 WILL confirm counter-trend sells and break the trend from late August...  Declines are swamping Advancing issues by nearly 5/1 to the downside, a similar ratio to VOLUME.   10 of 11 sectors are down with only Tech holding on just fractionally.  But Industrials, Staples, Financials, Discretionary, Utilities , Telecom, Real estate all down by more than 0.50%.. Far WORSE than any of the good days we've seen over the past few weeks and volume and breadth much more negative than any of the positive days in October.  No real 4 or 5/1 positive days in some time.. And breadth has been slowly trending lower as has been noted.  VIX up 5.5% thus far-  Yields have backed off early highs-  Might be a bit early to say today confirms a peak is in.. Given its early.  But a close here certainly would be a negative. So for the Bears. Important to hold early losses. But momentum clearly starting to rollover as was noted by MACD crossing over to negative a few days ago and Advance/Decline peaking out on the 11th of October while VIX rose for the last 4 of 5 days- Stay tuned

 

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DJIA gains being led by 3 stocks, CAT, MMM and BA, while 11 Dow stocks down

Just past Mid-day, markets continuing to show just mild gains-  Breadth is very flat, slightly favoring Advancing over Declining issues .. Most of the attention is being paid to the DJIA which is higher by 0.81%, yet 11 stocks are down of the Dow 30 and 3 stocks, MMM, CAT, BA are making up all the gains.  Financials, along with Industrials and Materials are the 3 sectors making up most of the gains, higher than +0.50%, while Healthcare, Staples, Utilities, Telecom and Real estate are all negative-  Yields continue to hug former highs near 2.40%.  the two things worth pointing out that are a bit different than the DJIA gains might lead investors to see this market concerns both the VIX breakout yesterday.. and also the Advance/Decline which turned down last week and hit the lowest levels since early October -  Overall, 3M, GLW, CAT, SWK, CF all higher by 3%, while on the downside- WHR, PCAR, IPG, CNC, WWG, BIIB all lower by 4% or more-  We'll need to see more signs of broadbased participation to have more confidence at this stage, but breadth and momentum definitely seem to be slowing of late while implied volatlity has jumped, so its important to keep a close eye on 2560-  Let me know if you have any questions

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Markets flirting with breakdown as UNDER 2560 has importance

Minor gains premkt with the majority of DJIA Futures gains coming from CAT and GM pre-mkt lift, both of which had gotten very overbought, but are both extending again-  Europe is mixed, with broader SXXP down while italy and Spain higher-  Treasury yields also spiking globally and important with TNX back up to 2.40% an important level given that this had been hit back in October but also this past Summer - overall, S&Ps' pullback yesterday got down to.. but not UNDER prior lows which hasn't happened since early September but momentum indicators are turning lower, as per MACD crossover and might very well be important similar to what happened on prior occasions this year, each time which preceded at least a minor pullback-  UNDER 2560 is important and negative on a close today.. and should be watched carefully.   Premkt gains today, as mentioned in CAT, GM but also HMNY, OCUL, GPK, VKTX, PII, SWK, ALXN, AMTD, LLY, HES, while on downside-   HNI,WHR, MAS, MSFT, OMC, BIIB, CNC

 

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Despite positive breadth, today's price action has caused some damage

A bit more than 2 hours remaining.   S&P remains lower, though off early lows.. while NASDAQ suffering the brunt of today's selling along with Emerging mkts as the US Dollar rally continues to gain traction-  Yields have begun to turn lower ever so slowly.. while the Defensive sectors are all outperforming today-  Staples, Utilities, Telecom and Real Estate- while ENERGY continues to be the top performing sector in the short run and stands to lead all other sectors in September performance-  Given Energy's rally. breadth is not nearly as negative as might have been expected. Both Advancers/Decliners positive while VOLUME also positive today in UP vs DOWN stocks-  However, some damaging technical price action today with NDX breaking the trend from July and S&P also getting below 2492 was important and negative and despite some snapback attempt.  Nothing really has been accomplished that's all that positive .    CRUDE OIL's gains continuing to show positive followthrough, while the Metals attempting to rebound after getting down to initial support-  Overall, no change in outlook based on today-  The trend showed signs of cracking LAST week, ahead of North Korea..  and if anything this just adds to the negatives in the short run-   The lack of negative breadth doesn't always lead one to think this is a false move.. but has to be watched carefully as FANG stocks continuing to weaken and AAPL not yet at levels to buy-  Let me know if you have any questions

 

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Crude Breaking out, while Treasury yields attempt the same

gm ...Core CPI coming in as expected, while headline beat by a fraction-   Jobless claims came in better/lower at 284 vs 300-  Overall markets have reached a level where yet again we could see Stallouts in price. Bonds have begun to selloff across the globe yet again w/ yields up at 2.20% which is important, while the Metals remain under pressure-  Important developments in the last 48 hours revolve around the move in Energy with Crude having broken out, and OIH, XOP also having made absolute breakouts, which should help Energy begin to mean revert-   Overall, the trend has been bullish, but continuing up into October might prove difficult, with near-term overbought conditions, along with counter-trend sell signals on S&P, DJIA and QQQ while weekly momentum remains negatively sloped and under pressure-   Key areas for Futures-  2486-7, then 2480 as support, while on the upside-  2497-9-  Premkt movers in HALO, ALV, THC, UNFI, while on downside-  HTZ, EPZM, OPK, ARRY, SMMT-  Let me know if you have any questions

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OIH and XOP make absolute breakouts to join relative from last week

Equities remain locked in range-bound consolidation with no progress in broader indices, while Interest rates continue to press higher, and TNX not too far away from pretty major resistance at 2.20%.   Energy is the overwhelming leader today with 2-3% gains out of OIH and XOP while Discretionary also makes headway with JWN, ORLY, UA, DRI, BBY strength, all up more than 3%.  Meanwhile the Metals continue to drift lower and have clearly fallen on hard times with both yields and USD turning up, in the short run.  Builders weak today along with Healthcare and Real estate, but otherwise, very little volatility and/or changes in most things to comment on.   It will be necessary for Equities to show some real upward thrust and breadth expansion soon, as the recent bounce did not do much for momentum and now things appear to be stalling out yet again.  Important to keep an eye on the exits heading into Expiration and late Sept/October.. for now, prices are holding up.. but Tech and Financials should hold the key

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Metals declining further as USD begins to stabilize

gm-  Mild gains out of Europe and US Futures slightly weaker ahead of this am's PPI data- Financials strong in Europe playing catchup to yesterday's US Data while Miners weak, and seeing Copper weakening around 1.5% today, falling further after the break of trendline support two days ago.   Big development yesterday was the Global bond selloff which helped US 10yr yields start to stretch higher while Financials followed suit and XLF breaking back up above downtrends from July - The real key will revolve around whether Technology can strengthen from here given its push up towards highs of its recent range, while AAPL starts to show some evidence of peaking out in the short run.   Support for today lies near 2488, then 2480-2, while on upside-  resistance is 2496-7, then 2500-2-  Bottom line... near-term positive trend intact.. but some evidence of counter-trend sells approaching for major indices by end of week, and upside for S&P lilkely contains gains much past 2505-  Premkt gains in SNAK, ALDX, JWN, CNC, FOLD, FINL, BCRX, while on the downside-   DCTH,WDC, MNKD, PTLA, TEVA, CGG, AGNC-  Let me know if you have any questions

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Financials now breaking out above 1-month Downtrend

Into mid-day..  Minor postive gains but followthrough to yesterday is disappointing ..  Breadth only about 3/2 and Tech and Healthcare are struggling to make progress.   The Big developments concern a minor Breakout in Financials which have gotten above Trendline resistance per XLF while Interest rates continuing to lift, both here and abroad-   USDJPY attempting its own minor breakout here above 2 month trend.. And Utilties bearing the brunt of the rate rise.. Down over 1%, while Real estate also lower by 0.95% bps   Healthcare and tech though negative and from a bullish perspective, would mean more to see these sectors show some real strength-   S&P above 2490 has no real resistnace until near 2500-5, but Next couple days will be importnat to see whether Technology's upward progress can continue.. And for now.. Seems largely to have stalled out in the last few days..  Energy still a bright spot as written about last week and many of the former laggards are starting to move higher, so this also should be watched carefully.. But overall.  Minor followthrough today and breadth and participation a bit less than desired-   Leading stocks in S&P today-  GPS, RRC, PRGO, LB, CHK, CMA, CTL, GT, while on downside-  MCD, ANTM, INCY, MCK, ESS, NUE.  Let me know if you have any questions

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Global bond selloff w/ yields lifting & yield curve steepening out

gm-  Further bond selloff across the globe has yields back up with TNX over 2.15 and a near-term positive which could have some effect at causing further near-term strength in Financials.   This would be a positive in how it helps to join Technology in whats thought to be a last ditch rally attempt higher, with SOX leading the charge in the short run. However, Momentum in equities overall has made lower and lower peaks and has NOT followed prices back to new highs, and now S&P is within 1-2 days of triggering counter-trend sells to join what the NASDAQ showed last week, while DJIA is about 3 days away in this regard-  Europe meanwhile showed evidence of SX5E breaking out yesterday and should have at least another few days higher in the short run as a result of this positive development-  Outside of equities..  USD continuing to make upward progress near-term particularly vs Yen while precious metals are weaker..  so we're in an environment where the Safe havens have begun to retreat.. but yet the move thus far in Equities back to highs has not proven particularly robust and something to watch carefully into the end of this week-   Premkt movers for today::  TA, TEVA, CTIC, EYES, AA, DWDP, RBS, ACH, ALDX, while on downside-  SAGE, HIIQ, MRNS, LMNR, BCRX, EVGN, PSTI..   let me know if you have questions

Europes SX5E breaking out while S&P to multi-day high close

Bottom line-  Today is a temporary positive with how the next 2-3 days should line up.  S&P has pushed even higher post Europes close.. Where SX5E has made its own breakout today above an area that's been there since May.  Semis have led all other S&P groups today and SOX with a near-term bullish formation that could lead a bit higher still before any rolling over.   Tech and Financials today showing the most strength , both up more than 1.5%.. While Materials and Energy also up 1-1.5%.. With all 11 sectors showing gains for today-   Breadth is about 4/1 positive which also is a good sign given how subdued everything had been of late.   And USDJPY, TNX are bouncing, while the Metals fall-  Gold lower by 1% today.. , down 15, while Crude has pushed back higher back above 48.  Overall when looking at Europe, at pattern of DJIA, and SOX.. And good breadth today.  All of these suggest that we likely can push up a bit more this week, and that today likely is not a 1 day affair- we'll see the extent to which momentum can lift.. But expecting a bit higher prices given the higher open and move higher throughout the session-

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Haven trades being reversed as Sept expiration week gets underway

As we kick off Sept expiration week, Futures are higher across the board today which began last night on signs of yields ticking higher and a bit of uncertainty being relieved.  Europe is higher by nearly 1%, while NKY and HSI in Europe also higher by 1%, and some definite signs of the Haven trades being reversed.. as both Yen and Gold are falling, while TNX has edged up a full 0.04 bps this am..  While this should be a temporary period where gains can happen in TNX or even USD, the downtrends in these are very well intact and S&P is still likely to find strong overhead resistance near 2485-90-  At present though, prices are up above the highs of the last four trading days on the open, which is a mild positive for US stocks- Resistance for today lies right at current levels initially 2471-2, and above not much until 2480-1.  On the downside-  2460 is our PIVOT for today.. and 2455 lies under-  Premkt gainers in TEVA, UVE, ARRY, NLNK, INCY and MRNS higher, while ACHN, SGYP, JBLU, GRUB, REGN, and AU-  let me know if you have any questions

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Insurance bouncing back given severe weakness in prior days

2 hours to go.. we've seen brief selling pressure last throughout the morning and early afternoon, with most European indices having closed mixed but most gains were given up by today's close-   Weve seen Energy comprise the majority of weakness today in the market, while Tech is also under pressure, which could be of concern, but as of yet, has not yet violated key levels-  Financials are bouncing back after the recent carnage earlier in the week, and Insurance is the bulk of these gains as this sector had been hit the hardest earlier in the week.  Of the 5 top performing names in the Financials space, all of these are insurance related.   Breadth is only slightly negative on the day, but nearly a 3/2 ratio of volume flowing into DOWN vs UP stocks.   OF the laggards,   Semiconductors, Energy, Food Stpl/Retail, Media and Tech hardware are the worst performing sectors, while Capital goods, Div Financials, Healthcare equipment, Insurance and Transports are all positive and best performing, with all of these higher by 0.50% or more.   Overall, we've seen the NASDAQ continuing to slide most of the day and underperforming most of the market pretty substantially, by 0.80% now with 2 more hours to go.   Have a good weekend..  and wishing safety to all those in the Southeast-

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Financials slide a concern- Copper starting to reverse lower

gm-  Most US index futures down 0.25% with Europe and Asia largely mixed..  Still seeing signs of Risk-off behavior with USDJPY sliding to lows of the year and Treasury yields slightly lower.. Gold, Silver higher.   S&P still very much mixed trading between 2445-2466-  UNDER 2445 would allow for acceleration, which likely shouldn't be bought right away given the seasonal tendencies and breadth deterioration of late-   Overall the mood right now has gotten downright glum with the ongoing hurricanes, lack of success in tax or healthcare reform and market that is very mixed of late and difficult to make money.. The recent downdraft in Financials is particularly important and will be key that Technology NOT join this weakness in the days ahead but the Insurance weakness likely won't end for another 3-5 days given the uncertainty regarding IRMA-   Discretionary meanwhile weakening steadily with Media deterioration , and Healthcare standing out as one of the better in terms of risk/reward, but more towards the Pharma end than Biotech in the next 60-90 days-   This am has Wholesale Inventories out at 10 am-   Premkt gainers in KURA, ZUMZ, NLNK, CLVS DRD, while on downside: TNTR, AOBC, EFX, MYL, FCX, JKS-  let me know if you have any questions.  Thoughts and prayers go out to those with relatives, friends or family in Southern Florida this weekend

 

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