MLR - Premarket Pulse October 29, 2012
Traders looking to get their fix today will have to settle for watching live-action news reports of the mayhem being caused by Hurricane Sandy as all U.S. exchanges have made the overnight decision to shut down trading for today, Monday, while keeping the option of remaining closed tomorrow and beyond open should that become necessary. As we have numerous friends, family and VoSI members along the East Coast our thoughts are with them.
The NASDAQ Composite traded below its 200-day moving average briefly on Friday, then managed a feeble bounce to close just above it on lower volume. It is currently 6% below its prior September peak. The S&P 500 finished roughly unchanged. With the U.S. Presidential election nine days away. most opinion polls currently put Romney only slightly ahead of Obama, however these polls carry a high margin of error of as much as +/-5%, thus the current polls are not predictive of who will win the election. Recall that in 1980 polls had Jimmy Carter leading Ronald Reagan by 10 points in September and Reagan won by a landslide. That said, the U.S. unemployment report falling to 7.8% gave a huge advantage to Obama. While this percentage is suspect, it nevertheless likely helped Obama in the polls, which makes us wonder what this Friday's jobs number will look like.
The negative impact of slowing global economies is causing many companies with exposure to Europe and Asia to issue warnings on their outlook for sales and/or earnings. Thus QE3 from the Fed and EuroQE from the ECB have encountered headwinds. There is also the issue as to whether quantitative easing will continue to have the positive impact on the market it has had since 2009, or whether it will become the bid to hit. Add to that a potential Romney victory where he could reduce or end QE3 and you have the possibility of a market anticipating weakness in the short term, since markets are forward looking typically by a number of months.
Precious metals ETFs gold GLD and silver SLV finished nearly unchanged on light trading volume. Both are trading just under their 50-day moving averages.
AAPL which reported unsatisfying earnings on Thursday came within a breath of its 50-day moving average then bounced, closing midbar on heavy post-earnings volume. AMZN bounced hard on a favorable earnings report. The number of leading stocks performing well remains scant which adds weight to the current downtrend continuing, with shortable bounces along the way.
Obviously, with U.S. markets all closed today, there is nothing actionable this morning.
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