Bargain Hunters Jump In

[Excerpted from Bill Cara's Daily Report]

After opening roughly -1% weaker, bargain hunters began taking advantage of the 2-day -4% sell off, with the broad market trudging higher for the remainder of the session, closing near the best levels of the day (S&P + 0.26%).

With the different spin this week, the S&P 500 (898.72 +2.30 +0.26%) and the DJIA (8,324.87 +44.13 +0.53%) eked out some gains after the early selling, but the NASDAQ (1,787.40 -9.12 -0.51%) lagged, closing lower.

There were no remarkable gains in the leading sectors, although Consumer Staples (XLP +2.1%) benefited as a safe haven play, and healthcare (XLV +0.8%) was up as well. The losers were Energy (XLE -1.0%) and Basic Materials (XLB -0.8%).

The Cara 100 tables are incorrect again – it’s a data source issue. Sorry.

Monday with Commodity prices getting hammered, it follows that the Toronto markets got hammered as well. The Toronto Composite (10,027.43 -255.67 -2.49%) and the Toronto Venture bourse (1,064.63 -28.33 -2.59%) were both down about -2.5% on the session.

Earlier Tuesday, Austral-Asian markets were soft. Japan’s Nikkei 225 (9,647.8 -0.34%), Aussie All Ordinaries (3,767.8 -0.43%), China (3,089.5 -1.13%), and Hong Kong (17,862.3 -0.65%) were all down. India (14,170.5 +0.90%) regained a small bit of the prior day’s reactionary loss after the too-soft budget was delivered.

The European equity bourses are a tad higher in morning trading today. The French CAC (3,100.8 7:48AM ET +0.61%), German DAX (4,687.2 7:33AM ET +0.76%) and UK FTSE 100 (4,226.6 7:33AM ET +0.76%) were all up.

In USD trading on the Wednesday, the trade-weighted $USD index (80.45 +0.18 +0.23%) gained, and so did the Yen (104.85 +0.61 +0.59%) and Loonie (86.25 +0.17 +0.20%). The Cdn Dollar recovered a bit of the prior day’s extreme loss. The Euro (139.83 -0.18 -0.13%) and Pound (162.85 -1.02 -0.62%) were the losers against the US Dollar yesterday.

In so-called fixed income trading, the US long Bond was a tad weaker ($USB 118.83 -0.11 -0.09%). The Treasury yields for 30-year (4.351 +0.34 +0.79%), 10-year (3.506 +0.11 +0.31%), and 5-year (2.394 -0.30 -1.24%) all lifted. The Treasury bill yield was unchanged at 0.155.

$GOLD continued to fall (924.90 -4.60 -0.49%), but the loss was minimal.

Crude Oil was much weaker again (64.05 -2.68 -4.02%), which was a fourth straight daily decline in prices.

Tuesday morning in the commodities and futures markets, Spot gold, palladium, platinum and silver are higher: (931.09 +6.19 +0.67% 07:50am ET); (243 +4 +1.67% 07:47am ET); (1149.0 -5.0 -0.43% 07:50am ET); and (13.325 +0.045 +0.34% 07:50am ET), respectively.

The Euro was a tad stronger (1.4029 +0.0069 +0.49% 07:35am ET).

Crude oil was also stronger (64.78 +0.73 +1.14% 07:35am ET).

The equity market has just opened with marginal weakness. The goldminers are up a bit.

Comments

[Mad Hedge F...:]

It may be too soon. I am about to do you a huge favor. You can clear all of the tickers and widgets off of your computer desktop. The only thing you need to watch now are the wild, gut wrenching moves in oil. Everything else will follow suit. So when it drops $10 in four trading days, as it has done since Tuesday, it sends a sell signal so obvious that even Stevie Wonder can see it. For confirmation, take a look at Euro/yen, which I earlier identified a great “tell” for global risk taking (see my earlier piece at www.madhedgefundtrader...). It has sold off sharply since the “green shoot” killing Thursday unemployment figures, and if it breaks below ¥132, the sushi will really hit the fan. Also look at the long term chart of the volatility index (VIX), which shows that we hit major long term trend support at 25%, and is overdue for a rebound to a least the mid thirties.

Jul 07 11:58 AM