Data

by Larry Levin


Monday's good data was said to be responsible for the Dow's +200 point rally. Today's horrible data was nearly wholly ignored, as the Dow closed marginally lower. The trend is up now, which makes it easy to ignore that which doesn't agree with the price action. The news doesn't affect the price, price affects the news.

Today's data came in three flavors of bad news: personal income & outlays, factory orders, and pending home sales.

Personal income and outlays (spending) was worse than expected. Bloomberg said, According to Fed Chairman Ben Bernanke, the Fed is hoping that a bump up in consumer spending will help strengthen the recovery. Apparently, that will have to wait until at least next month. Personal income in June was unchanged, following a 0.3 percent boost the month before. The median market forecast was for an incremental 0.1 percent gain. The wages & salaries component slipped 0.1 percent after posting a healthy 0.4 percent advance in May. June weakness was partially due to the cutting of temporary Census workers.

Spending was also down, so both income & outlays were worse than expected.

Factory orders; what factory orders? Factory orders fell 1.2 percent in June which follows a 1.8 percent drop in May (revised downward from minus 1.4 percent). The decline for the durable goods component was revised two tenths lower to 1.2 percent. Orders for nondurable goods fell 1.3 percent. The data show declines across many categories including for both capital and consumer goods.

Pending home sales dropped like a rock last month, falling 2.6%. Pending home sales index fell 2.6 percent in June to 75.7. Year-on-year the index is down 18.6 percent. Sales were down in three of regions. The National Association of Realtors is warning that near-term sales of existing homes are likely to be "notably lower" in contrast to the spring surge which was fed by government stimulus.

Down only a little today with all of this news? Interesting, isn't it?



Previous Day's Trading Room Results:

Trade Date: 8/3/10

E-Mini S&P Trades*
(before fees and commissions):


1) No "Secrets" trades today.

2) Algorithm positions (8)

3) “Reading the Tape” positions (1) combined Secret’s, Algo, & “Reading the Tape” total… +4.25



Sign up as an AvidTrader Member to receive "The Technician" Value Area's each day. The market then has an 80% chance of filling the Value Area. Many traders familiar with the Value Area and the techniques that go along with it use it to help them decide what trades to do each day. Join and see how this technique can help you trade more successfully!