Wednesday, September 23, 2009

Evening Briefing for September 23rd

* MARKET THEMES FROM WEDNESDAY - Stocks showed good resilience in early trading, holding above support around ES 1062, even after a bearish oil number knocked commodity-related stocks for losses. A rebound ahead of the Fed announcement took stocks back near their day's highs, and strong buying after the announcement brought fresh bull highs in ES. Those highs were not confirmed by a number of sectors, as noted in the intraday Twitter posts. They were also not confirmed by the new high/low indicator (1675 new 20-day highs, 192 lows) and were accompanied by tepid advance/decline numbers. As we retreated back into the day's range, selling pressure mounted significantly, accompanied by strength in the U.S. dollar, buying in U.S. Treasuries (drop in yields), and selling in gold and oil. We dropped below the day's lows (and that 1062 support region), creating a outside, reversal day. The action is consistent with the topping scenario mentioned in the recent indicator review, setting the 1070 region as continued significant resistance. Market wrap here.

* OVERSEAS/OVERNIGHT NUMBERS: 11:30 PM CT - Japan, industry output index; 3:00 AM CT - Ifo business sentiment index; Italy, merchandise trade balances. Earnings reports due Thursday can be found here.


-- Worthwhile readings with a macro focus;

-- Good look at stock indexes, oil, and GOOG;

-- Questioning the market rally and other excellent links;

-- A look at P/E ratios and what they mean for stocks and much more;

-- Lessons from sports betting and trading;

-- Housing less affordable despite price drop.