Good morning.
We had a nice crowd in the room last night for out China PMI party to celebrate the start of a new Month whose mood was to be set by the Chinese PMI. The number came in just around expectations at 51.7, I had consensus between .6 and .8 so right in the middle. Goldilocks really. HSBC also puts out a PMI and theirs rose form 49.4 in July to 51.9, a big jump. So China is not falling apart. That is good news.
Now for our minefield of data:
8:15am we will hear form ADP and get our first read on employment changes for the Month of August. At 10am today we will get ISM manufacturing and construction spending numbers. 10:30am is the oil inventories.
ADP expectations have been reset to June’s number of just 13K jobs. A negative number and the gap will most likely disappear. A number greater than 13k and we will have another positive data spot in our pockets.
ISM, we would like to beat 55.5 from the previous month but that ain’t gonna happen. We already have the regional numbers and we know there was softness. Holding 50 of course is critical as that is the expansion/contraction line. Expectations are for 53 even but I think we have a little play either way on this number as we are getting a pretty good picture now of what is going on macro wise.
Oil got a little lift from the China news and is waiting to for today’s economic news. Bearish price projections for 60-65 dollars per barrel are popping up. It will only take a few positive economic numbers to get bull rolling again.
The dollar dropped nicely last night (I shorted after the PMI numbers and sold just before I began this update.. ). I would like to see the beast get back into its 80-82 box and just stay there.
We should have a few more days of volatility as the big players begin placing their bets for the month of September.
Quote of the day:
Some circumstantial evidence is very strong, as when you find a trout in the milk. – Henry David Thoreau
|
Chart |
Score |
Day-1 |
Change |
|
40 DPI |
-2 |
-6 |
+4 |
|
52 WNH |
+2 |
0 |
0 |
|
10 DHL |
0 |
+4 |
-4 |
|
Total |
0 |
-2 |
+2 |
Slight improvement overall in breadth, but a breakout is needed, perhaps today’s gap is just the right thing to shake the market awake.
$SPX chart:
I would score yesterday’s match a tie, the Bears get a point for tje weak open and the bulls get a point for running up higher than the open. The 2nd half of the game was neutral.
The goal lines today we will leave the same, Bears need a break of 1045 and bulls a break 1067 to convince me they have the scoring power. If this AM gap-up holds through U.S. news we should open near Friday’s high.
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