Gross Domestic Selloff
There was a momentary euphoric rush when the revised Q2 gross domestic
product figures did not come in negative (and slightly above
expectations), but when players realized that a revision down from .7% to
.2% still feels like a recession — and that the slight up-tick from
forecasts came largely from consumer spending — they set on the exit
buttons of stock index futures. Remember, we are still an industrial economy
and have been in a manufacturing recession for months. Manufacturing matters
and cutbacks in our highest value added products trickle down to all manner
of services and service sector jobs.Â
Traders using a strategy that has worked repeatedly during recent
sessions, selling the high of the opening range, did well as there were opportunities
to get short in the 1167-68 area when the September S&P futures
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traced intraday double tops. Shorting at the trigger of the daily Pullback
From Lows setup also is working out nicely. Now, 1152.50 is holding up as
support in this market during the lunch hour, although 1146-48 looms as the
next level of support if this market undercuts and sets a new multi-month
low.Â
Debt futures are moving in counter-step to stock index futures. A slight
down revision in the GDP report of the price deflator, a measure of
inflation, helped. 10-year notes
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PowerRating), from the Momentum-5
List, spiked to a new contract high, but are having difficulty advancing
above 107 12/32.Â
Natural gas
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continues to make impressive declines and is down for the 10th
consecutive day. Notice that an Off The Blocks
short has worked out several times in this market.Â
December gold
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setup and is up 1.8 at 276.2.