Wednesday, September 15, 2010

Market comments for Sept. 15th (UPDATE)

Data released this morning shows the following. The Empire Manufacturing Index for Sept. came in lower than expected at 4.1 compared to an expectation of 5.0, which was lowered from an earlier expectation of 6.0 and last months reading of 7.1 disappointing the market. Last month this was a surprise to the upside because other Fed areas reported sluggish data and this one was a standout because it looked pretty good. Well that myth has been exposed. And yesterday's release of the Business Inventories number of an increase to +1.0% also disappointed the market because of building inventories instead of sales. It was interesting to watch the progression of the changes in the number. Last month the number was announced at +0.3% while today the number was adjusted upward to +0.5%, and the number expected today was initially at +0.7% and then adjusted upward again to +0.8% so you see a number of +1.0% is indeed disappointing for the market.

Import Prices for August were up +0.6%, while Export Prices were up +0.8%. Last month both numbers were negative at -0.2 and -0.3 respectively.

Industrial Production for August as well as Capacity Utilization will be out later at 6:15am PST.

Dow Futures went negative on the data to -40 points. S&P 500 Futures are down about 5 points.

Yesterday started off negative but then managed to end positive on a few Indexes, but not the Dow. The Candlestick pattern was the Black Spinning Top but the last 2 candlesticks did form a Bearish Harami pattern, as I had predicted in my previous post. Consequently a Sell-If signal was issued by Any downward gap at the open validates the Sell signal.

UPDATE 11:15am PST

Industrial Production came in at +0.2% while expectations were for +0.3%. Interestingly, July's data was revised down from +1.0% to + 0.6%, which is a bigger decline.

Capacity Utilization came in at 74.7% for Aug., while the expectations were for 75.0%. July's data was revised down from 74.8% to 74.6%, again another revision of a number downward. Are you spotting a trend yet? :)

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