Morning Thoughts January 10

  • A dull day yesterday – Volumes weak – barely cracked 6bn shares – down 2% vs. 5day ave – Turnover of $186b lowest.
  • SPX holding above that 200dma steadily (we hit 1,275 and saw a good technical bounce) – outside of that, simply boring.
  • Only meaningful headline in the afternoon was the Nov consumer credit data, which jumped most in a decade (since 2001) – came at $20.374b vs. prior $7.645b (highest before this was in 2001 at $27.167b) – market hardly reacted.
  • Semis were a notable outperforming sector – SOX took out its 50 and 100day ave behind strength in Applied Materials (AMAT +3%) – Piper was positive on the name and Deutsche upgraded the sector (upgraded BRCM and FCS). Tech in general were squeezy ahead of CES tonight.

  • Many sectors remain consolidating looking to break higher.  With this morning's gap higher some of them may break that resistance.  We are only interested in long positions in any of those sectors on a solid daily break above there, which we see as unlikely today.

  • The S&P 500 into the 1290/1300 area might reach initial resistance.

  • After scaling out of some longs yesterday and taking some risk off the table we are looking to fade (short) a bump into the 1290/1300 area on the S&P 500 if we get clear signals

  • The Dow, Russell 2000 and S&P 500 are approaching their October 27 highs and that is where this 1290-1300 initial resistance band on the S&P 500 should serve as …well, resistance.  From there we would expect some consolidation.

  • 1260ish on the S&P 500 should hold as support to trade against.  If we fail  below there in any clear fashion we would turn more medium-term bearish again.

  • Please note the 60 day hourly chart of the S&P 500 here:


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