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The markets traded underwater all day, but surged in the last hour of trading to make a small gain on the day. SPX closed higher by $2 at $1472 and RUT gained $5 to close at $885. VIX remains flat at 13.5%. Trading volume remains weak with 2.4 billion shares of the S&P 500 stocks trading, remaining below the 50 dma. Volume rose 4% on the NYSE but was flat on NASDAQ.
Retail sales came in at an increase of 0.5%, an improvement over the previous month's 0.3% increase. The PPI dropped 0.2% in December. The Empire State manufacturing survey was again in negative territory for Dec with a -0.2% reading. This was better than the previous month's -0.8%, but this is the sixth month in succession of contraction in this survey of manufacturing.
The most interesting news of the day was Germany's announcement that they are moving their gold reserves back to Germany; some will come out of the New York Federal Reserve Bank, and some will come out of France's central bank. What does this say about trust between the global banks? Maybe things are worse in Europe than we thought? Maybe Germany is worrying about our government's solvency?
There certainly is plenty to worry about... In the meantime, my Feb iron condor remains in the black. I positioned this one a little tighter than normal, so I can afford to close it early for a reasonable gain. I don't want to be exposed to this market for too long these days.
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The markets are holding right at resistance. In fact, given the onslaught of political posturing and refusal to negotiate about the debt ceiling, the market is holding up surprisingly well. I suppose the conclusion is that traders don't yet take the rhetoric seriously. SPX closed at 41471, down $1 and RUT also lost $1 to close at $880. VIX remained flat at 13.5%. Trading volume was mixed with a drop in the trading of the S&P 500 stocks to 2.2 billion shares and a drop of7% on the NYSE. But trading on NASDAQ increased 5%. Maybe that was the furious trading in AAPL on the reports of iPhone 5 sales falling off.
Today didn't bring any economic data for the markets to pore over. Tomorrow we get retail sales and the PPI.
My Feb iron condor on RUT at 820/830 and 910/920 stands at a P/L of +$440 or +3% with delta = -$82 and theta = +$140 on 20 contracts.
It seems like we have moved from one death watch (fiscal cliff) to another (debt ceiling). Fun, fun...
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The markets continued the recent pattern of trading sideways as SPX closed up $5 at $1461 and RUT closed at $880, up $5. Trading volume was flat with 2.5 billion shares of the S&P 500 stocks trading today; this is right at the 50 day moving average (dma). Trading volume was also flat on NASDAQ and up 3% on the NYSE. VIX inched up 0.2 points to close at 13.8%.
SPX traded up to resistance at $1465 this morning but then steadily declined into the close. Alcoa's better than expected earnings report set the stage this morning for a favorable market, but it wore off quickly. Some favorable earnings reports and optimistic guidance would be helpful for this market, but we don't have any significant blue chips reporting this week. Next week some of the big banks and Goldman Sachs report. Those reports may move the markets.
We are hip-deep in forecasts and predictions this time of the year. I am seeing a surprising number that are predicting a strong market for 2013. Given the headwinds constraining our economic recovery and the debt/spending debate, those predictions appear a little too optimistic to me. The only significant economic data expected for the balance of this week are tomorrow's unemployment claims. Analysts are predicting flat numbers on the order of 365k initial claims.
Increased theta decay as we near expiration (about $280 today on my 20 contract position) is helping my Jan iron condor on RUT to lessen its losses, which now stand at about 35% - rough beginning for the new year.
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For the last several sessions, traders have been taking
a “wait and see” view of the markets. SPX has bumped up against resistance
around $1465 for several days. This morning, that pattern reappeared,
with SPX opening, trading up to about $1469, and then pulling back to $1461. But
then the surprise: the markets strengthened around 2:30 ET and started trading
upward to close at $1472, up $11 and finally breaking the highs set in 2012. So we are left with the question I posed above: Is this break-out for real? Trading volume remains at the 50 day moving average, so that is one data point arguing against the break-out. Can the markets break out with the backdrop of the debt ceiling debate? Maybe they can; it doesn't have to make sense.
New unemployment claims rose slightly this week to 371k, underscoring
the fact that our country’s economic recovery is weak at best. This is a
fragile economy. The debate about the prospects of another recession continue.
The Russell 2000 Index (RUT) has generally followed SPX by trading
sideways the past few sessions, and closed up $2 at $881 today. RUT has been
trading stronger than SPX in that it broke its own 2012 highs in mid-December.
But today, RUT appeared to lag behind SPX.
Earnings announcements will probably determine the short term market direction until the debt ceiling talks begin to get serious. American Express announced layoffs today of 5,400 employees; AXP announces earnings January 17. Some of the major banks report next week.
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The markets continue to basically trade sideways to slightly down. SPX lost $5 to close at $1457 while RUT held up better, losing $1 to close at $875. Trading volume popped up a bit with 2.6 billion shares of the S&P 500 stocks trading; trading volume rose 4% on the NYSE and rose 2% on NASDAQ. VIX remains relatively low at 13.6%.
Perhaps the prospect of the debt ceiling debate and the ratings agencies waiting on the sidelines to down grade our bonds has traders a bit concerned. The earnings announcements in the next few weeks will also have an influence on this market, especially the guidance offered for the next quarter. For all those reasons, it isn't too surprising to see the market trudging sideways.
I have to cut this blog short this evening due to other commitments.
