A storm is brewing
Welcome to Minyanville...it is a beautiful morning in our town and no one is outside. As we drove into town today, I turned to car pool buddy Linda and said "where is everyone?" It was 6:37 am EST and when coming off the lower level of the bridge that late, we are normally stuck in heavy traffic. Not today...I didn't even have to hit the brakes.
So we have the market wound up like the Tazmanian Devil and fewer folks in town at their desks. Sounds like one heck of a volatile day coming our way. The funny thing is the number of widely followed releases coming in one day. At 8:30am July Payroll Employment, Personal Consumption and Income are released, followed by The University of Michigan Sentiment index at 9:45 with June Construction Spending and July ISM at 10:00am. No wonder the town is empty - who would want to be seen reacting to all of that.
All this anxiety has been set up by a market looking for the next significant direction. The various indices over the past two months have been in a well defined range, and market participants (and critters) are looking for that one piece of news or evidence that could suggest the trading range is coming to an end. Many were hoping a breakout was coming yesterday, only to be disappointed by the failure to hold the gains as the market approached the upper end of the range (Exhibit 1).
Exhibit 1 - SPX still in the range
Now we must wait and see what is in store as these economic numbers are released. Thank God we have a secret agent in town...Bond guy 008 Reynolds...and if we know anything, we know he will be on this like no other.
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