Thursday, August 27, 2009

Evening Briefing for August 27th

* MARKET THEMES FOR THURSDAY: Early weakness led to a breakout below recent multiday highs, before notable weakness in USD led a rally in risk assets, with rebound strength in gold, oil, and stocks. It was yet another instance in which weakness was stopped dead in its tracks by aggressive buying, creating a distinctive price rejection. We saw only 739 20-day highs against 348 lows, and momentum continued to be skewed to the downside, with Supply exceeding Demand. (I will post the final numbers tomorrow before the open via Twitter; follow here). The ability of the market to trade back into the multiday trading range and shut off selling suggests that we may be seeing another one of those relatively flat corrective periods that typically precedes new price highs in a bull market. A sustained drop below today's lows would clearly negate that scenario.

* OVERSEAS/OVERNIGHT NUMBERS: 3:00 AM CT - Italy, PPI; 3:30 AM CT - UK, GDP; 4:00 AM CT - UK, economic sentiment; 7:30 AM CT - Canada, PPI.



-- Market Delta is offering a free webinar on Delta Divergence: 9/3 after the close;

-- A look at today's stock market reversal;

-- Consumer debt can hurt banks;

-- Thanks to a sharpeyed reader for this summary of research on risk taking and the brain;

-- Stocks finding support at their 20-day moving averages;

-- Dividend stocks to hedge against failing Social Security system;

-- Self employed workers work the most.