Yesterday’s industrial production numbers and company mergers are being credited for yesteday’s market rise. The weak retail store numbers and deteriorating sales at Wal-Mart and Home Depot were shrugged off. This morning we had a new look into mortgage application which was a mixed bag; purchases were down 3.1% while refinancing was up 17.1%. The ES paid no attention but has been drifting up since the 7am EST news. The Eurpoean markets are down slightly overnight while the Asian markets are mixed. The treasuries gave back most of Monday’s gains yesterday and are now trending back up and diverging with the ES current pre-market move up. The Euro is currently unchanged while the Yen is up slightly. The carry trade is mixed and providing no direction for the markets. On the daily volume comp, price has moved above the 80 LVN area and is now back in the huge HVN cluster centered around 93. Pretcher of Elliot Wave fame has grabbed some headlines this morning with his head and shoulders analysis of the DOW which he says could drop to 8000 if the neckline is broken. That neckline on the ES is about 66 which we have marked as interim support. I’m not sure what to expect from today. The market has been in summer doldrums where after about the first hour, it slowly rotates for hours on little volume and then suddenly breaks out for big moves. There is 10am EST Oil news that could inject some temporary volatility, but the report usually does not add much direction to the markets. With nothing to really drive the market, it should be a day with good price rotations.
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