Holding 1773 & Market Internals

The Market is holding the 1773 level mentioned yesterday. We changed me SP500 contract to ESH4

The is cash entering NYSE and Nasdaq which might help the market to trade higher the rest of the day. Next week we might see a slow recovery specially in the emerging markets.

Bellow we can see the price action of the cash vol in the NYSE for the last 3 days

SP 500 hourly chart

The chart below shows the marked trading range. We are now neutral, accumulating small positions, we will be bull over 1800 and bears bello 1770

Stocks Higher on Tame Inflation!

Stocks on Wall Street are on firmer footing to end a rough week after three down-sessions ahead of next week’s taper toss-up at the Fed. The latest installment on the inflation front was the 1.3% y/y gain in core PPI, which will not keep Janet up at night! With the 2-year budget bill sailing through the Republican-controlled House last night a quick Senate approval is seen next week, which puts the onus on the Fed to taper if it so chooses. Investors seem to have made peace with that fact, however, and there has been a little relief short-covering. Note that some short-sellers prefer to square up their books on Fridays and lock in profits. This Friday the 13th could be one of those days.

Tame PPI and no expectation for a strong pick up in prices near term should keep the FOMC on hold next week. Many of the doves on the Committee remain concerned over the downtrend in prices and want to see inflation moving higher toward the 2% target before trimming asset purchases. Analysts suspect this will be a stumbling block to QE tapering at next week’s FOMC. Also, analysts’ are not sanguine the recent 3.6% pace of Q3 GDP growth will be sustained. Along with eroding liquidity, analysts think the Fed leaves policy unchanged with near-zero rates and $85 B in asset purchases. Analysts wouldn’t be surprised to hear language, however, that reflects improvement in the economy and labor market, suggesting a tapering is in the cards.