Yesterday’s market direction rally is now behind us and the market direction needs to consolidate and then push higher. Right now a lot of investors are on hold waiting for the employment numbers tomorrow and Syria still looms in the background. Good employment numbers which is what I am expecting, also means that the Fed could begin to scale back Quantitative Easing as early as September. The impact of this event cannot be measured but only guessed at. Today Weekly Initial Unemployment Insurance Claims came in at a decent while not exceptional number but still points to slow but steady growth in employment. This marks the 4th week of good Weekly Initial Unemployment Insurance Claims numbers so I would expect the unemployment number on Friday to be decent.
Market Direction Advance / Declines
At 2:00 PM the market direction is almost equally split with 50% of stocks advancing and 48% declining. The number of new highs was up today but only to 100 while the number of new lows continues to outpace new highs, with 141 new 52 week lows. This number needs to turn around for the market direction up to stay stronger.
Market Direction and Microsoft Stock
I just wanted to point out a couple of things in my intraday comments. Microsoft Stock is showing support at $31. This is the put strike I sold recently. Volume is slowing today and is primarily showing buying pressure. Microsoft stock though did break down to $30.95 which while not concerning in itself does indicate the possibility that the stock may push back below $31 once more just to retest for support. The declining volume is a good sign as many weak hands have hopefully been shaken out of the stock.
The selling this morning though took place right at the open. There was big volume of over 7 million shares in a 1 minute period. I jumped in and put in an offer to buy at $30.85 but the stock never even came close. Obviously someone wanted out of a large volume of shares. Volume afterwards dried up nicely and the pressure was all to the buy side. While I like the $31 support level I won’t be surprised if Microsoft stock falls back to at least $31 over the next couple of days once more.
Market Direction for the S&P 500 – 1650 Still Key
The S&P 500 is now back above 1650 and so far today has stayed there. Most of the day has seen the S&P holding the 1656 valuation and trading remains very tight.
Market Direction and Russell 2000
The small cap fund the Russell 2000 which trades under the symbol IWM offers a bit of a different look on the market direction intraday. Today after three days of moving higher, the IWM ETF is trading just above its 50 day simple moving average (SMA). While it still needs to get back up over 103.82 to make a new higher high, this is a good sign that the market direction may be about to shift and rally higher.
Summary of Market Direction Intraday Comments For Sep 5 2013
It looks like a consolidation day today which is what the market direction outlook yesterday was calling for. I think the market direction looks strong enough here to hold in the green to close out the day. Then the market must move higher. Intraday then, everything looks set for a sideways close which would be good for the market direction rally to be able to continue tomorrow.
I am continuing to seek Put Selling opportunities. I sold puts this morning on AT&T Stock although I may have been a bit early as better premiums may emerge. Meanwhile I sold my shares of Nucor Stock but I am still holding my Nucor Stock naked puts at the $43 strike which I sold earlier this week.
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