A Second Look In the Mirror?

Without much data to move the markets, investors took a second look in the rear view mirror and fixated on the implications of last week’s strong employment numbers. At least that appears to be the case for now.

In addition to this, China’s latest trade balance report shows it is unavoidably evident that six interest rate cuts, a surprise currency devaluation, and other stimulus measures are not still not enough to overcome its economic struggles. Nevertheless, one day does not a market make. Below is today’s performance summary.

The SP-500 confirmed its topping pattern with a new 6-day low and closed  @ 2078.58 (-20.62 / -0.98%). The Nasdaq-100 finished @ 4655.52 (-51.71 / -1.10%). If it fails support @ 4600, there is downside potential for it to fill a 100-point gap. Even though the Rusell-2000 showed the most relative weakness, it has maintained its uptrend and consolidation pattern @ 1184.43 (-15.32 / -1.28%).

The VIX made a new 17-day high and increased @ 16.52 (+2.19 / +15.28%).

Treasury rates continue to climb to higher levels. The 10-Yr closed @ 23.42 (+0.09 / +0.39%) and the 30-Yr @ 31.06 (+0.17 / +0.55%).

The was no fundamental reason for the pullback in the US Dollar Index. Today’s performance was technically driven by an overextended price rise and its uptrend remains intact @ 99.01 (-0.14 / -0.14%).

Trading near the solid support level @ 1075, Gold barely budged an inch as it ended the day @ 1088.10 (-0.80 / -0.07%). WTI Crude Oil has closed lower for 4 consecutive days @ 43.87 (-0.65 / -1.46%) and appears headed to retest support @ 42.50.

The Dow Jones Real Estate Index @ 285.53 (-4.00 / -1.38%) places it in danger of violating its 55-day moving average, which occurrence could potentially set it up to retest 270-275. Switching over to residential real estate, the Dow Jones Home Construction Index has now made a triple bottom pattern @ 558.95 (-8.95 / -1.58%) and if it fails to maintain support, then prepare to visit 530-520 levels.

Market Condition

The SP-500 finally succumbed to its overbought condition and has initiated a bearish correction pattern as it broke below the lower channel. Strap on those chinstraps!

Good day and evening from Hillbent…

Daily Chart Analysis

 Volume Radar Alerts

Market Moving Events

Bullish

• Economy / Employment / USA: The Labor Market Conditions Index for October-2015 has now advanced 6 consecutive months @ 1.6 vs. consensus @ 0.6 and prior revised @ 1.3.

Bearish

• Economy / Growth / Global: The OECD reduced its 2015 global economic growth forecast to 2.9% vs. its previous outlook in September @ 3.0%. In 2016, it is predicting 3.3% vs. its earlier estimate in September @ 3.6%.
• Economy / Trade / China: China’s Trade Balance for October-2015 increased to $61.64bn from last month’s $60.3bn, but was below consensus @ $63.8bn. However, yr/yr exports dropped -6.9% vs. previous month’s contraction @ -3.7%. Imports were also down @ -18.8% which was less than consensus @ -15.3% and better than prior @ -20.4%.

Neutral

• Real Estate / Residential / Canada: Housing Starts for October-2015 were @ 198.1k vs. consensus @ 200k and prior revised @ 231.3k.