Today’s rally mirrored the antithesis of Monday’s capitulation. However, before embarking upon the path of irrational exuberance, I would caution all that the stock market still needs to surmount key resistance levels. It takes time to heal from a mauling like the one recently exacted by bears.
Although economic data and market news events were light, they clearly punched above their weight. Durable Goods Orders indicated a 2nd consecutive month of strong results and comments issued by the Fed Reserve reduced investor uncertainty when it announced that the need for a September rate increase is “less compelling”. It was just that simple.
No further comments, but do keep Hillbent for the Market Direction…
To no one’s surprise, the rally in stocks produced some bullish market breadth for the SP-500 components. However, the lack of new 5-day highs or new 52-week highs underscores the damage of the recent selloff and we will need to see patterns of positive breadth in these categories before taking this rally seriously.
- Advancers (488) vs. Decliners (11).
- New 5-day highs (5) significantly lagged the number of New 5-day lows (54)
- New 52-week highs (1) also trailed new 52-week lows (206).
- Bullish reversals (172) lagged Bearish reversals (0) today.
|SP-500||1940.51||(+72.90 / +3.90%)|
|Nasdaq-100||4219.602||(+203.28 / +5.06%)|
|Russell-2k||1132.19||(+28.09 / +2.54%)|
|VIX||30.32||(-5.70 / -15.82%)|
|10-Yr Rates||21.72||(+0.39 / +1.83%)|
|US Dollar Index||95.25||(+1.28 / +1.36%)|
|Gold (Cash)||1124.60||(-13.70 / -1.20%)|
|WTI Crude (Cash)||38.60||(-0.71 / -1.81%)|
|DJ Real Estate||276.00||(+6.98 / +2.59%)|
|DJ Homebuilders||574.48||(+18.47 / +3.32%)|
Volume Radar Alerts
- Cameron Int’l Corp (CAM) @ 59.93 (+41.11%) on 1683% volume surge
- Nasdaq OMX Group Inc (NDAQ) @ 49.69 (+1.74%) on 185% volume surge
- Monsanto Co (MON) @ 97.08 (+8.57%) on 291% volume surge
- Intuit Inc (INTU) @ 83.29 (+4.28%) on 277% volume surge
- CBRE Group Inc (CBRE) @ 32.15 (+1.84%) on 277% volume surge
- Schlumberger Ltd (SLB) @ 70.09 (-3.35%) on 630% volume surge
- Freeport-McMoran Inc (FCX) @ 7.92 (-3.88%) on 135% volume surge
- Transocean Ltd (RIG) @ 11.60 (-4.92%) on 129% volume surge
- Wynn Resorts Ltd (WYNN) @ 74.29 (-1.88%) on 78% volume surge
- Newmont Mining corp (NEM) @ 15.81 (-2.23%) on 60% volume surge
Market Moving Events
- Real Estate / Residential / USA: MBA Mortgage Applications for the week of Aug-21-2015 saw a 2.0% weekly increase in Purchase Applications vs. previous week @ -1.0%. Refinancing applications contracted to -1.0% vs. previous week @ 7.0%. The average rate for 30-year fixed mortgages on conforming loans dropped to 4.08% vs. 4.11%. (Related link)
- Economy / Manufacturing / USA: Despite weaker exports suffering from a stronger U.S. Dollar, Durable Goods Orders in July-2015 increased 2.0% m/m vs. consensus @ -0.4% and prior revision @ 4.1%. (Related link)
- Central Banks / Interest Rates / USA: Comments by Federal Reserve New York President, William Dudley, that a rate increase for September is now “less compelling”, thus providing temporary relief to investor’s uncertainty. (Related link)
- Equities / Mergers & Acquisitions / Energy: Schlumberger (SLB) announced plans to buy Cameron Int’l (CAM) at a 56% premium or $66.36 per share. Given the rich valuation SLB has assigned to CAM, some analysts speculate this to be a sign that an end to the bear market in energy prices may not be too distant. (Related link)
- Commodities / Energy: According to the latest EIA report for the week of Aug-21-2015, Crude Oil inventories in the U.S. declined -5.42mm which was below the projected surplus of +1.02mm and the previous week’s buildup @ 2.62mm. (Related link)
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