Market Sideways Despite Better ISM Index
The Dow gained a measly 23 points today despite a much better than expected ISM Index.
Fundamentals
ISM index turned in surprisingly well today, turning in 55.7 vs consensus of 53.8 and last month's reading of 55.4! Yes, ISM index is expected to turn in lower than last month but instead turned in higher! This led to a strong opening this morning with gains across the board. However, profit taking set in almost immediately, taking the market back down to almost par by the end of the day. Investors still rushed back into equities on the news, causing a surge in bond yields across the board and options traders rushed back into call options, depressing total equities put call ratio by a huge 0.4 from put inclination to call inclination. All of these screams only one thing... that investors and traders overreacted. Especially in the face of so much headwind, one cannot expect the US market to suddenly resume bullishness on a single economic data. In fact, things are looking more and more dangerous as signs of trouble continue to build up with the continued rally in Gold. Central banks are still accumulating the yellow metal the exact same way they do prior to all market crashes.
Technicals
Even though it was supposed to be a positive day, the Dow merely made a sideways day like it did over the last three trading days. If a heavyweight number such as the ISM index fails to result in a significant movement, something truly is wrong and suspicious. In fact, looking at the technicals, it is very clear that the Dow is merely waiting for the 30MA to catch up a little before... it heads lower. Yes, everything from the technicals and fundamentals continue to put market inclination to downside. In fact, this is looking even more dangerous than ever and that one could truly profit greatly if prepositioned to do so. My Master's Stock Options Picks subscribers and me took a 170% profit with put options on MSFT and another 78% profit with put options on VZ today! Join my Master's Stock Options Picks Service and profit with me now!
For now, the Dow remains in short term bear trend within an intermediate neutral trend and primary bull trend.
Fundamentals
ISM index turned in surprisingly well today, turning in 55.7 vs consensus of 53.8 and last month's reading of 55.4! Yes, ISM index is expected to turn in lower than last month but instead turned in higher! This led to a strong opening this morning with gains across the board. However, profit taking set in almost immediately, taking the market back down to almost par by the end of the day. Investors still rushed back into equities on the news, causing a surge in bond yields across the board and options traders rushed back into call options, depressing total equities put call ratio by a huge 0.4 from put inclination to call inclination. All of these screams only one thing... that investors and traders overreacted. Especially in the face of so much headwind, one cannot expect the US market to suddenly resume bullishness on a single economic data. In fact, things are looking more and more dangerous as signs of trouble continue to build up with the continued rally in Gold. Central banks are still accumulating the yellow metal the exact same way they do prior to all market crashes.
Technicals
Even though it was supposed to be a positive day, the Dow merely made a sideways day like it did over the last three trading days. If a heavyweight number such as the ISM index fails to result in a significant movement, something truly is wrong and suspicious. In fact, looking at the technicals, it is very clear that the Dow is merely waiting for the 30MA to catch up a little before... it heads lower. Yes, everything from the technicals and fundamentals continue to put market inclination to downside. In fact, this is looking even more dangerous than ever and that one could truly profit greatly if prepositioned to do so. My Master's Stock Options Picks subscribers and me took a 170% profit with put options on MSFT and another 78% profit with put options on VZ today! Join my Master's Stock Options Picks Service and profit with me now!
For now, the Dow remains in short term bear trend within an intermediate neutral trend and primary bull trend.
posted by Jason Ng at 7:12 PM
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