Join        Login             Stock Quote

Was That The Pullback??

 February 05, 2013 01:20 PM

The market is sharply higher after closing on its lows yesterday.  We commented that depending on how desperate portfolio managers are to put cash to work we could see dip buyers emerge quickly.  But for the market to only be lower for one day is surprising.  Although the day is still early.

It is unclear what the real catalyst is for this morning's move.  It could be the news that Obama will seek a package to avoid the sequester.  Outside of that there aren't too many datapoints that would boost stocks.

Earnings continue to trickle in, but are a mixed bag for the most part.  In economic news, the January ISM Services Index came in at 55.2, which is below last month's reading of 56.1.

Asian markets were mostly lower overnight, led by a 2.3% decline in Hong Kong and -1.9% in Japan.  China actually closed a bit higher after its HSBC Services index rose to a 4-month high of 54.0.

[Related -Savings Glut and Financial Imbalances]

Europe's markets are bouncing from yesterday's selloff.  A number of countries in Europe released their services PMI readings.  Overall, the Eurozone PMI came in at 48.6.

The dollar is slightly lower today, while commodities are mixed.  Oil prices are higher near $96.85 while gold prices are weak around $1671.

The 10-year yield is rising again today and back to the 2.0% level reached last week.  The volatility index is down -5% after a big spike higher yesterday and back below the 14.0 level.

Trading comment: We have been looking for a pause in the market, but didn't think it would only last one day, especially given that the selloff yesterday was more pronounced than we have seen in weeks.  That said, the S&P 500 is back above the 1500 level but not by a meaningful amount.  The SPX first hit 1500 on 1/24, and at the time we said there would likely be some consolidation around that key level before moving convincingly above it.  So far it has been 8 trading sessions that we have oscillated around that 1500 level.  So the market may have actually built back up some of its internal energy, although we still think the consolidation last a bit longer.

iOnTheMarket Premium


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageSavings Glut and Financial Imbalances

Martin Wolf in today's Financial Times discusses the reasons for low interest rates and suggests some read on...

article imageA Dividend Aristocrat Is Now On Sale

The bear market investors have been dreading is already here for many individual stocks. While the S&P 500 read on...

article imageTwo Picks to Play Defense in a Slowing Economy

Is the economy slowing? Last Thursday the Institute for Supply Management (ISM) reported that its read on...

article imageUS Jobless Claims Fall, Moving Closer To Multi-Decade Low… Again

US jobless claims continue to cast a positive glow on the outlook for the labor market. Today’s weekly read on...

Popular Articles

Daily Sector Scan
Partner Center

Related Articles:

Two Picks to Play Defense in a Slowing Economy
More Articles on: Finance

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.