Sunday, August 30, 2009

Evening Briefing for August 30th

* MARKET THEMES FROM FRIDAY: We saw stocks make a marginal new bull market high early in morning trade before selling off hard in the morning and rebounding weakly in the afternoon. The rejection of the price highs, combined with the divergences at the market peak, led me to take a small short position in the S&P 500 Index and hold it over the weekend. This is not intended as a short-term trade (but does have a relatively tight stop); I will be blogging about the position early this coming week. With the drop in stocks, we also saw firming of the U.S. dollar and some selling in oil and gold, though the latter was not especially pronounced. In premarket trade, Japan started its day higher on the election news, but stock index futures in the U.S. have pulled back from early strength. A move below Friday's lows would target the 8/27 lows around 1015 in the ES contract.

* OVERSEAS/OVERNIGHT NUMBERS: 3:00 AM CT - Italy, retail sales; 4:00 AM CT - Italy, CPI; EU, consumer prices; 7:30 AM CT - Canada, GDP.

* EARNINGS: BTGG, CMM, JAVA (before the open); BNHNA, CFI, FMCN, SINA (after open).


-- Registration info for Wednesday's free trading psychology webinar;

-- Provocative thoughts about a two-track economy;

-- Still more questions about the rise in beaten down bailout financial firms;

-- Worthwhile ETF update and market view;

-- Nice investigation of how market trades after false downside breakout;

-- FDIC taking on bank losses;

-- Stocks showing the highest short interest.