- Details
- Written by Dr. Duke
- Category: Dr. Duke's Blog
- Hits: 1796
The markets opened this morning in positive territory, but slowly weakened as the day wore on. SPX closed down $12 at $2019 and RUT lost $18 to close at $1145. Trading volume increased a bit with 2.4 billion shares of the S&P 500 trading, but this is still below the 50 dma at 2.5B. Trading increased 12% on the NYSE and increased 13% on NASDAQ. The VIX volatility index increased about 0.7 points to close at 16.5%.
No significant economic data was reported today.
All in all, it was a slow day in the markets, but the weakening as the day progressed is a little worrisome. Could we possibly retest the correction lows once again? I will be watching $1997 on SPX as the "line in the sand". A break down through that price would be a concern.
- Details
- Written by Dr. Duke
- Category: Dr. Duke's Blog
- Hits: 1776
The markets seem to be slogging through molasses with small price moves, low trading volume, and declining implied volatility. SPX closed down $3 to $2031 while RUT lost one dollar to close at $1163. Volatility remains relatively low at 15.8%. Trading volume is sluggish with 2.1 billion shares of the S&P 500 trading today (flat with yesterday and below the 50 dma). Trading volume declined 1% on the NYSE and rose 6% on NASDAQ.
Housing starts for September came in at 1206 thousand, up from August's 1132 thousand. Building permits were on the opposite side with August's 1161 thousand declining to September's 1103 thousand. But the good news is that these data remain fairly positive for the real estate market with new housing construction running around a million units for 2015.
Earnings announcements continue to elicit strong responses with CMG down about $50 and ISRG up $35 in after hours trading. Playing these announcements is not for the faint of heart. For those of you who love the thrill ride, AMZN announces Thursday after the close.
The bulls appear to be in control of this market now; we are seeing the classic higher highs and higher lows. But trading volume is low and the price moves are limited in either direction. Are we returning to the sideways trend we saw earlier this year? Many of the large institutions have predicted a strong rally for the balance of this year, but we are starting to run out of time.
- Details
- Written by Dr. Duke
- Category: Dr. Duke's Blog
- Hits: 1775
The markets continued higher today with SPX closing up $9 at $2033; RUT wasn't quite so bullish, losing about fifty cents on the day. Volatility continues to contract, with VIX dropping nearly a full point today. VIX has been steadily dropping since its recent high of 28% on September 28th. Trading volume wasn't particularly high on this expiration Friday with 2.3 billion shares of the S&P 500 stocks trading today. Trading volume was up only 1% on the NYSE and moved down 11% on NASDAQ. Many analysts were looking for SPX to definitively break the recent mid-September highs around $2000, and we had our doubts earlier this week, but today's move higher was encouraging. Perhaps we can finally stop worrying about a retest of the flash Monday lows from late August.
Industrial production for September decreased 0.2%, slightly worse than August's -0.1%. Capacity utilization was essentially flat in September at 77.5% (August was 77.8%). The JOLTS job openings data came in at 5.370 million for August down from July's 5.668M. The University of Michigan's consumer sentiment survey reported 92.1 for October, up from September's 87.2.
I closed my November iron condor position on RUT today for a gain of $115 per contract or +13.4%. Even though this is an early close (34 days left), we were able to lock in 82% of the maximum potential gains. Why continue to be exposed to the market if you can lock in over 80% of the potential gains? This brings our year to date returns in the Flying With The Condor™ to +43%.
Enjoy your weekend.
- Details
- Written by Dr. Duke
- Category: Dr. Duke's Blog
- Hits: 1899
IBM reported disappointing earnings after the close and is down about 5% in after hours trading. Will that affect the overall market? Possibly. This earnings season has been a bit of a mixed bag thus far. At the least, IBM's performance may worry analysts about the state of the overall economy. I doubt that it will force the market lower, but it could hold it down a bit, maybe to more of a sideways trend. SPX traded down about ten points from the open, but recovered to close up one dollar at $2034. I would term that as weakly bullish. RUT traded in a similar fashion, closing up two dollars at $1164. RUT traded down as low as $1155, the 50 dma, but bounced off that support and closed quite a bit higher at $1164. Trading volume was down across the board with 2.1 billion shares of the S&P 500 trading (the 50 dma = 2.5B). Trading was down 15% on the NYSE and down 7% on NASDAQ. Volatility was essentially unchanged with the VIX at 15%.
This is a weak week for economic news; the principal market moving events will be the earnings announcements.
I closed the November iron condor position in the Flying With The Condor™ service on Friday for a gain of 13.4%; this brings our year to date performance to 43%. Why aren't you with us?
- Details
- Written by Dr. Duke
- Category: Dr. Duke's Blog
- Hits: 1904
Just a couple of days ago, I was complimenting SPX for closing for three consecutive days above $2000, or roughly the mid-September high. But SPX couldn't stand the heat and has now retreated, closing down $9 at $1994. RUT has traded even weaker, never reaching the mid-September highs. RUT closed at $1137, down $11. Trading volume remains below the 50 dma on the S&P 500 with 2.4 billion shares, but it was up from yesterday. Trading volume rose 9% on the NYSE and increased 23% on NASDAQ. Volatility remained calm, with the VIX rising only four tenths of a point to 18.0%. My previous thesis appears to be holding, viz., not strong enough to mount a bull run for new all time highs, but not really weak enough to start a bearish trend lower.
Perhaps the Fed's Beige Book threw cold water on the markets. A them running through the minutes was the weakness of our economy and whether it could withstand a interest rate hike. The PPI for September came in at -0.5%, lower than last month's 0% change. Retail sales for September didn't inspire anyone, up 0.1% over August.
I'm out here in Las Vegas for the Traders Expo. I am looking forward to seeing many of you here. It is always nice to put faces to the email exchanges.
