Eyes were on Apple yesterday as they announced their year end quarter profits. Up big. Blew away expectations on the top line and bottom line. All was well... right? Opps, a little asterisk on the score card announcing an accounting change on how revenue from Iphone subscriptions are realized. That twisted the market's panties and the confusion caused the markets to go down and that started our overnight futures journey. In addition the USA president decided it was time to do what millions upon millions of American's have been doing for the last two years. Tighten our belts. This put strength into the dollar and we all know by now dollar rally = futures rout. So off to grandma's house we went.
So here we are this morning trying to recalculate Apples earnings (no matter which way you account it, Apples earnings beat big time) and with a dollar rally and futures down 3.15 (they had been down as much as 10).
So what did the rest of the world do:
Asia
The Nikkei and Hang Seng slid from the open. Closing down a weak average for around -2%. It was trend down all day.
Europe
Europe is a little bit stronger today. Down around the 1/2 % area. Some sense has returned to the markets and from a weak opening the European markets have strengthened this morning.
United States
Futures as of this writing have improved and the ESH10 contract (SP500) now are down only about 3.5 points.
Economic news:
Yesterday we got the largest drop in new home sales in xx years. Today we will find out how the prices are holding up. Soon we should start seeing some positive numbers out of these home price indices.. a decent bounce off the bottom from the year to year numbers . The month over month numbers have gone positive so the year over year numbers can not be too far behind.
Watch for reaction around 9am and 10am this morning. The Manufacturing numbers have been beating and meeting so a miss there would be a surprise. The consumers are just getting their Christmas credit card bills so I will not be a surprised with a miss in the confidence numbers.
Earnings:
Earnings this morning are coming in strong with just a few misses. The Oil industry continues to be a disappointment here. Corning on the other hand showing incredible growth.
Breadth Charts
40 DMA % Index
The chart put in a bottom curl yesterday. It still scores a -4 (the NYSE had a positive move up). We will see today if a bottom is in place here.
10 Day High - Low
Improvement on this chart also from yesterday. The chart scores a 0 and it is setting up that tomorrow it should begin to signal a bullish move. Today it scores a 0.
52 Week New Highs
This is our weakest chart scoring a -6 from yesterday. Today the chart is setup to go neutral with any type of pricing strength. The first 30 minutes would like to see at least 30 new highs for the NYSE to get the charts to neutral. There is no chance for the chart to move to bullish today.
Conclusion
The breadth charts are losing their high bearish scores and have moved for the -18 realm to today's score of -10. Still bearish but showing signs of possibly bottoming in here. Look for strength in the 52 week new highs and the 40 DMA % Index.
$SPX Cash numbers:
I am going to leave the SPX chart almost exactly the same as yesterday which turned out the be the NR7 day I thought the day before was going to be. Yesterday did a good job establishing a bottom here. I have added one additional line at yesterdays high around 1102. The Bulls would like to begin establishing higher highs in here and stay above yesterday's low. The futures are strengthening into the open here so the large gap down is evaporating.
Watch the 1085 area, if it breaks today it is a long ways down to next support.
Translating to the ESH10..
You can see the over-the-river-and-through-the-woods-to-grandmother's-house-we-go type journey the futures did overnight. They are back above the bears goal line for the cash market here so I will leave the lines alone. Like above I added a line at 1102 area to put in a higher high. That would be a good goal for the bulls to begin pushing out of this bottom. Also like above watch that 1080-1081 area.. It it breaks we will go lower.
The markets today as I see them.. Good luck and happy trading.. hope to see you in the trading room.
Marlin aka: RedlionTrader
