S&P 500 Recap

Good morning S&P futures are down 8 points this morning. The usual doom and gloom headlines are visible. A lot of talk about stimulus from politicians over the weekend. On Friday earnings from Google put traders in a better mood and the numbers from Citi weren't terrible. Futures were modestly upbeat in front of the EU stress test results. The Consumer Price Index for June fell by -0.2%, which was below the consensus estimates for a drop of -0.1%. When you strip out food and energy, the so-called Core CPI came in with a gain of +0.3%, which was above the expectations for +0.2% but in line with May’s +0.3%. The Empire Manufacturing Index for July was reported at -3.76, which was below the consensus expectations for a reading of +3.9. The index was better than June reading of -7.79.
 
The Friday session opened with a gap higher and quickly put the high of the day on the chart after just four minutes of trading. After ten points of selling the low was put on the chart right at the end of the opening hour. The rest of the session ping-ponged within the trading range established during the first hour but a final hour rally brought the SPX off the lows to retest the highs at the close. 


Advancing volume was weak compared to advancing issues and the broad NYSE Composite Index was weaker than the SPX; both of these suggest little confidence in the rally. But the TRIN is suggesting further upside ahead.Friday’s volume was higher than Thursday's volume, as would be expected on options expiration. The intraday volume pattern is most interesting for the lack of a volume spike during the rally at the close. The Breadth Indicators look much more bullish after Friday's action while the McClellan Oscillator ten day average continues to be overbought. One thing that catches our attention is that the McClellan Oscillator was negative Friday despite the positive closes on the indices.

 
 Long bond is down slightly this am and the DXY is up 0.42%, but both are range bound and waiting for the Fed.