More of the Same

by Larry Levin

As far as our estimate that Monday or Tuesday would be a "break-out" type of day, we can scratch off one. Monday was incredibly slow, with the NYSE notching the lowest volume of the entire year. Yes indeed folks, it was more of the same...a whole bunch of nothing.

Before the market opened we were treated to the latest batch of data from New York, specifically the Empire State Manufacturing Survey. This report came in below expectations, which surprised economists - of course. Bloomberg said "The Empire State report poses bad news for the manufacturing outlook. Readings on new orders, unfilled orders, and shipments all show month-to-month deterioration in August. If these readings are repeated in Thursday's Philadelphia Fed report, expectations will look for a step lower in the monthly ISM manufacturing report.

"The Empire State's headline index did show improvement, but this index is the sum of a single subjective question on general business activity. Again, questions on key specifics for orders and shipments are negative. Manufacturing has been a central positive for the nation's recovery and a loss of momentum for this sector would raise the odds of a double dip."

Hmm, more of the same I suppose.

Thirty minutes after the market had opened we received the latest on home builder expectations. It wasn't very optimistic. Bloomberg said of the report "Homebuilders report declining conditions for a third post-stimulus month in a row. The housing market index for August fell one point to 13 and is down nine points from a recovery peak of 22 in May. Homebuilders continue to complain about tight credit, inaccurate appraisals and competition from distressed properties."

Additionally, a recent report out of Japan showed the Land of the Rising Sun was headed for another economic decline. Surprising only economists, growth slowed to an annual 0.4% pace in the recent quarter as consumer spending slowed both in Japan and around the world, thus slowing its exports.

Despite all of this news, the stock market went about its merry way of trying mightily to rally the market on the lowest volume day of the year.

"More of the same," indeed.


Previous Day's Trading Room Results:

Trade Date: 8/16/10

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


1) VA sell @ 9:15am at 1076.75 = b/e (1 lot)

2) Algorithm positions (8)

3) “Reading the Tape” positions (0) combined Secret’s, Algo, & “Reading the Tape” total… -2.50



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