Better but not really claims data attempts to tug at bulls heartstrings, intraday though, more "sell-e-brating" of Wednesday's FOMC decision is the story of the day. As of 11:00 ET the SP-500 (SPY) is off 1.00% on slightly higher levels of aggravated bull.
A flat pre-market got a boost from the latest weekly benefits data. A still heady but less nasty count of 530,000 surprised analysts expecting 550,000. The number did also manage to establish a headline "Hurray!" by hitting a two-month low and found "early bulls" more than willing to buy the dip provided by Wednesday's most important hour of trading, per CNBC.
Celebratory cheers and bids were also encouraged as continuing claims data beat views of 6.18M with a figure of 6.13M. Of course that stat as well remains stubbornly entrenched in a "jobless something or other" for the economy.
Separately, disappointing housing data did rattle a few bulls expectant of something more. Investors caught buying into the latest dip out-the-gate were somewhat rudely greeted with existing home sales for August that totaled just 5.10M annualized units. The number falls short of forecasts of 5.35M and below July's 5.20M units.
The data seems particularly iffy following the Fed's comfy view of the world. Investors could be taking the longer-term view of things by recalling policymakers surprise message yesterday afternoon of economic conditions not warranting exceptionally low fed funds rate levels for an extended period. I'm sure bulls are collectively saying under their breath, "That will teach them!"
In those sometimes intertwined markets, the lowly Greenback (UUP) is staging some strength, up 0.50% at 22.82 but just removed from fresh year-to-date lows while an ongoing pow wow by the G-20 takes place today.
Treasuries (TLT) are bid 0.45% but still consolidating near recent daily chart highs. In conjunction with further drilling to the tune of -1.00% in Black Gold (USO) and a break of two months worth of technical supports; that instrument looks prone to a flight-to-safety move by bulls looking to strap on some "red chutes" and rotate out of equities.
And finally, on the corporate confessional side, there have been a handful of decent reports but none influential enough as to cause a cheer beyond the name itself. That being said, potential market mover Research In Motion (RIMM) is on deck for later this evening. Analysts expect the Crackberry manufacturer to post profits of $1.00 per share and an improvement of 16% from the year-ago period.
Technically, contrarians schooled in Fibonacci patterns may want to do the homework on two Gartley / Butterfly patterns potentially setting up for a bearish reversal. This strategist's own discretionary findings suggest a pattern resistance zone exists from $87 - $92 and which was tested with Wednesday's highs of $88.08. In front of the report shares of RIMM are off nearly two points at 83.80 and confirming the pattern top further by moving below yesterday's gravestone doji.
On the option side in RIMM, the trading is relatively heavy with more than 100,000 contracts changing hands versus a daily average of 72,000. Calls have a slight edge on puts with a ratio of 0.75. Most active, the October 90 call has seen volume of nearly 14,000 on open interest of 19,500.
Priced at $2.95 per contract, implieds are bid and richly-priced at 65% versus SV readings running from about 20% to 40%. Personally, were I a bull in RIM, which based on the above strongly suggests otherwise, I wouldn't be a buyer of that type premium obviously popular with other investors. While I'm forbidden to make "recs" or "wrecks" for that matter, "selling a lil' something (extra)" in the form of a bullish and wide front-spread makes much more sense and maybe "cents" to this strategist.
Chris Tyler
Senior Staff Writer & Options Strategist
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The information offered here is based upon Christopher Tyler's observations and strictly intended for educational purposes only, the use of which is the responsibility of the individual.
