So, the US jobs data and news out of Europe weighed heavily on the markets today.  Technically, I was a little concerned yesterday after two down days off of 1150 horizontal resistance (SPX) .  Now, significantly concerned after 3 down days as the SPX quickly shoot through 1131 support in afternoon trading.  We have to watch SMA200 and 50% Fibonacci retracement levels at this point unless news changes the pattern.

If you step back and look at the consumer, you see a similar failure to be inspired.  As a matter of fact, while the consumer became less confident in their own futures over the last 2 months, the markets have been going up – that’s a nasty divergence and likely a sign of some manipulation by those who can.


PRINCETON, NJ — Despite the recent upturn in the nation’s equity markets, Gallup’s Economic Confidence Index, at -34 during the week ending Sept. 12, confirms a downward trend in consumer confidence that started in mid-August. Although economic confidence in the U.S. appeared to be improving at this time last year, just the opposite is the case in 2010. Consumer perceptions of the U.S. economy are now substantially below the depressed levels of a year ago. During each of the first two weeks of this month, 47% of Americans rated current economic conditions as “poor.” While in September of last year, fewer Americans were giving the economy “poor” ratings than was true earlier in the year, that is not the case in 2010. In fact, consumer ratings of current economic conditions are worse now than they were a year ago.



Of course, it’s not fair to assume that the securities market and the consumer should always be in harmony, but we have to take notice and be congnisent that we’re a consumer driven market and a nervous consumer slows economic growth.  How do you increase confidence without first increasing employment? Or, said another way, how do you convince companies to increase employment in the invironment of a cautious consumer?  Let’s just say I’m glad I’m not a policy maker these days.

Let’s got back to the trading implications.  The retail traders are emotional and losing a little of their bullish optimism that’s been building over the last month. We can’t assume that we’re in some kind of low volume bull run similar to what we saw back in March.  Instead, I’m approaching the next few days as an opportunist – if you give me intraday moves in either direction, I’ll take it.  However, I still don’t want to swing much and those I do want to swing need to come down to support levels so I can take a better risk/reward position.

Durable Goods Orders and New Home Sales will shape the morning, so don’t expect a lot of trades out of me until those numbers are out of the way.   See you tomorrow!





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