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Emerging Markets/Commodities trade weakening ahead of Jackson Hole

Minor gains in US Futures and in Europe as slow grind higher ahead of Yellen's Jackson Hole Speech at end of week- Little directional change for equities the last couple days and the trend and bias is for a bit more strength into end of week-  The US Dollar has begun to firm a bit which is resulting in EM weakness and underperformance in Energy and Materials stocks near-term as speculation continues about Yellen becoming more hawkish.  But most data still shows just a 54% increase by end of year and almost certainly she'll stress the data dependent approach and we could see Dollar weaken shortly thereafter with a possibility of a TY Yield breakdown - For now the key developments in the last couple days focus on CONSUMER DURABLES having broken back out to new highs-  (See S5CODU-Bloomberg) which has largely been led by Homebuilding shares and Retailing which have both started to show compelling near-term relative strength which in turn has aided Consumer Discretionary-  Semiconductor rally though getting up near resistance and getting stretched and still no new highs in XLK after it peaked back on 8/15 with Demark signs of exhaustion-  For the next couple days, still likely that S&P should drift higher into 2200 area, and looks early to fade stocks here just yet, but rally is starting to get a bit more selective which is being shown in breadth in the last couple weeks and in general a dropoff from mid-July-  For now, a bullish stance is still correct, looking to sell into gains near 2191 in Futures, then 2198-2200 as trading levels for today, and 2185 PIVOT, 2179-80 as support-  Early gainers today: CLVS, OSUR, WNC, LCI, INSY, while on downside- EXPR, LZB, SOL, INTU-  Let me know if I can answer any questions

S&P Pennant since mid-July continuing, and push up towards highs likely into Jackson Hole, and for now, it's still right to position in bullish fashion in US


Developed markets vs Emerging have largely been weak throughout 2016 outside of a minor bounce from April/May-  The last couple weeks have seen Developed strengthen a bit relatively vs the Emerging trade, but the real make-or-break lies directly ahead, which has been repelled on numerous attempts since late May-  IF we see a breakout of this downtrend and move back OVER lows made in March (which should be resistance to gains), then more substantial UNDERPERFORMANCE in Emerging markets would be likely-  For now, we're getting closer to areas where it's been good most of the year to buy into the Emerging mkts, thinking the US Dollar trend continues lower, supporting Commodities and Energy, Materials, and EM.