Monday, August 17, 2009

Evening Briefing for August 17th

* MARKET THEMES FROM MONDAY - A steep drop in overnight stock index futures carried over to sustained selling pressure during the day, taking stocks to multi-day lows. Defensive themes dominated among the sectors; we also saw commodity weakness, a drop in 10-year Treasury rates, and strength in the U.S. dollar. In short, there was broad profit taking among risk assets, with notable weakness among the emerging markets. We saw about 226 stocks make fresh 20-day highs, against 1022 lows; only 47% of SPX stocks are now trading above their 20-day moving averages. That is the weakest level since the early July lows. We have moved from what I earlier described as extended topping to actual short-term market correction.

* OVERSEAS/OVERNIGHT NUMBERS: 3:30 AM CT - UK, CPI; 4:00 AM CT - Germany, ZEW survey of economic conditions.



-- Ten excellent rules for sports psychology and trading;

-- Outlooks for recovery; led by capital spending, not consumer spending;

-- Interesting thoughts on vertical thinking among quant blogs;

-- Problems with valuation of UNG and other good reads;

-- America's banks looking like Japan's and more insightful links.