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Wednesday, April 27, 2016

Daily update 4/27 Factory orders

The FED did not rock the boat.

While SPX was up slightly the COMPX was down .5% on an Apple earnings miss.  I think that put a bit of a damper on big cap buying.  The odd thing to me was the strength in the SOX.  PC shipments were not good for the quarter and now we find out neither were IPhones.  That seems like a poor demand from an awful lot of chips.  Beats me.  The breadth was strong once again at +66%.  New highs picked up dramatically to 120.  That is interesting.  I am wondering if there aren't a lot of gold/silver miners in the new high list.  GDX made a new high recently so that is a possibility. 

The futures pushed up enough to give us a green price bar at the close.  They look like they want to go up again.  If so there should be upside out of the gate in the morning.

The green count is hanging above 50.  Plenty of room on the upside before becoming overbought.

This is an odd technical setup.  IWM is at rally highs while COMPX is in a short term downtrend.  SPX is stuck in the middle.  Market internals show the bulls are still in control and SPX looks like it wants to head up again.  Month end mark up time the next couple of days.  A test of the rally high in SPX seems likely.  Whether the bulls will push much higher then that might depend on COMPX turning around.

Here is look at the consumer durable goods.

The trend of YOY negative readings continues.  Still no real sign of improvement.  I have shown the auto inventory build a number of times over the last several months and have been expecting production cut.  This report showed a 3% drop for motor vehicle orders.  That will continue to hurt the industrial production data.  If there is enough of a slowdown then the employment data could be affected.  I don't think I have ever seen the broad economy pick up while auto manufacturing was slowing in my entire life.  It would not be easy to do.  With the inventory build as high as it is I think there will be several months of reduced auto production.  Whether that ends up putting the U.S. into a recession remains to be seen, but as weak as the economy is it is possible.


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