Yesterday we observed how the market started to loose momentum. After being broadly positive with gains over 1% in most stock indexes with leading stocks making new highs, the market put reverse and went negative for a while to end barely positive.

 

However the damage was greater in leading stocks such as AAPl which ends the day with losses near 2%.  Other leading stocks had a similar behavior.

 

This is not a good sign and that is why I preferred to cash in the profits in our swing trade in ALXN which made new highs but then sold off.

 

Today the macro data comes in line with concensus or better than expected, however, this doesn't mean they are positive.

 

 

The most important data due today, the ISM Manufactoring PMI, comes better than expected with a reading of 50.6. However this barely "expansive" because a reading below 50 means economic contraction.

 

However, the internals of this data point were pretty negative with the production index showing contraction and exports decreasing while imports increase.

 

 

 The unemployment claims remain over 400k which isn't positive.

 

 

Only 33% of the "market monitor" is positive at these moments, which most world markets showing losses.  This confirms the loss of momentum mentioned earlier.

 

Also the chart of the S&P 500 shows loss of upwards strength and it is probably we retest 1200 or move lower.

 

 

Tomorrow we have the important unemployment rate and Non Farm Payrolss numbers in USA at 8:30 before the market open.

 

 

We are going to be cautions waiting if tomorrows data dissapoints and the market want to continue correcting.

Best Regards,

                       Victor Riesco