Headline this morning from the Philly Fed..... "Current Business Outlook Explodes Higher", printing 35%, up from 19% last month and the highest in 7 years. I read through the report as posted at CNBC and learned that Prices Paid had surged to 67.2%, up from 54.3%. What they did not report, but was in the report, is that Prices Received rose to 21%, up 3.9 from last month. Interestingly, Prices Paid, less Prices Received has reached a level not seen since 1979. Can anyone spell "Crushed Margins"? It looks like Sell Side Analysts will be burning up their key pads, adjusting earnings expectations for the rest of the year.
Also reported is a CPI print at 0.4%, vs expectations of 0.3%, and a core rate of 0.2%. Of course, that does not include increases in food or energy. Or Cotton, which surged today to a new historical high above $2. It must be the demand for new white robes from all those Middle Eastern revolutionaries needing to look good on TV. (I wish I had said that, but credit must be given to ZeroHedge). Also this morning, the New Jobless Claims report was offered, printing 410,000, up 25,000 from last week and higher than expectations.
The last headline that caught my attention was the new high in bonds issued by Portugal, seeming to say that perhaps those Europeans have not yet resolved their Sovereign debt problems after all, even though they have been off the front pages of the Business Media. I addition, I am reminded the Irish to go the polls at the end of this month to elect a new government, which promises to re-write the terms of the ECB bailout. These are really interesting times!
The markets opened soft this morning, off about 15 Dow points, and then have rallied since the Philly Fed report. At 11:30, the Dow of up 11, the SPX is up 1.53, while the rest of the major indexes are mixed. Oil is higher at 85.18, Gold is nearing 1400, trading at 1381.5 'and Silver is at 30.88, just 4 cents away from a new Post Bass Bros high. The Euro is higher at 1.360 and the Dollar is lower at 77.96. Surprisingly, the 10 year Note is 1/2 higher at 3.565% and the Bond is also 1/2 higher at 4.651%
OUr Momentum Change indicators are again in Neutral territory, and the 1/20 Sell signal is still in effect. In case anyone needs to be reminded, the best results are achieved by acting at the time the signal is generated, or when the signal is confirmed, and I do not recommend shorting at any time distant from the signal or the confirmation. Of course, long positions should always take advantage of any opportunity to sell after a signal is generated.
As I have stated repeatedly since this rally has continued after our initial Sell signal, I will have no trade recommendation until I get either a Sell confirmation or a new Buy Signal. There are still a number of active timing signals that suggest a market top is at hand, and a large number of divergences. In addition, for the past 4 trading days, the Confidence Indicator has been Bearishly diverging, as is the McClellan and the Sentiment Indicator. With new highs being achieved daily, the internal measures of strength continue to erode.
Best To Your Trading!
Bill
No comments:
Post a Comment