Evening Briefing for September 30th

* MARKET THEMES FROM WEDNESDAY: Stocks traded stronger overnight, but were buffeted by early economic reports before a weak Chicago PMI report led to very strong selling and a retracement of much of Monday's rally. Stocks rallied strongly off their lows, only to sell back down, and try another bounce late in the day. The net result was that stocks are finding important resistance in the low 1060 range and support at the Friday lows--particularly in the NASDAQ and Russell 2000 Indexes. Gold and oil were strong today; the U.S. dollar was weak relative to the Aussie dollar; and 10-year Treasury yields were firmer. I found the selling today to be significant; a break in any of the indexes below the Friday lows would suggest a more extended, intermediate-term market correction. The aggressive position from my system was stopped out on the break below 1050; no positions at this time.

* OVERSEAS/OVERNIGHT NUMBERS: 1:00 AM CT - Germany, retail sales; 4:00 AM CT - EU, unemployment; 6:30 PM CT - Japan, household spending, unemployment. Earnings reports scheduled for Thursday can be found here.

* WORTH READING:

-- Sugar as the new oil and other worthwhile reads;

-- Thanks to an alert reader for this heads up on the Google Domestic Trends page; here's a look at queries re: real estate;

-- PIMCO perspective on investing in a low yield environment;

-- The danger of reasoning by metaphors when dealing with the economy;

-- StockTwits has its own Dr. Phil offering a shrink's view of markets;

-- Interesting post on the "party effect" in trading.
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