Tuesday Night Recap

ES 10.06.09My overall view has not changed, thus my absence in writing.  The market ran this morning with news of a sooner-than-expected rate hike by the Aussies however their economy allegedly hasn’t suffered as severe a turn down as the US so obviously they felt it was *their time*.  Add to that the internet chatter of secret meetings and you’ve got traders buying higher yielding currencies [not the USD] and commodity-related equities……..until mid day.   Once London closed, the Bulls in the US just couldn’t keep market momentum going and we drifted off into the sunset.  After hours tonight, Sydney and Tokyo haven’t shown much demand for equities either; call it profit taking.  Whatever.

In my mind, the news just began to wear off like any other news pop.  The *secret meetings* rumor has been around for over a year so as all other rumors, it fades quickly. 

While I still feel the overall trend is higher, I believe we may have topped out today on Wave B of a correction and will begin Wave C lower tomorrow.  A failure to trade above todays high will reinforce my conviction on this.  I’m seeing ADX continued weakening rather than a spike in strength off of todays move.  As with many breakouts or breakdowns, we merely re-tested the Regression Channel resistance and failed today; closing at the 20d.  Tomorrow is another day.  I closed out my ACF long and shorted NTRI when I felt 24% was too high of a pop on the WMT deal.    I remain short ES_F and DRV which are aching slightly but again, I’m standing by my convictions scaling in. 

AA officially kicks off 3Q earnings season in the morning.  Guidance will be closely scrutinized going forward.  You have to ask yourself *is weak guidance baked in at this point?*.   That would be a big Hell no.  We’ve also got BOE and ECB meet over the next two days which will have traders listening attentively for any signs of a rate changes there and we also have mortgage applications [minimal effect] and EIC petroleum report [slightly more impact].  Neither of which I feel will move the market more than a few hours.  Could be wrong; wouldn’t be the first time.   Good luck-

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