Kenny Polcari
KennyPolcari.com
We are now in the final stretch of 2015......4th Qtr starts today....let the countdown begin to the new year......
As the curtain closed on the 3rd qtr of 2015 - investors/traders took stocks - around the world - higher as asset managers went on a shopping spree taking advantage of the sale that was created during September. It is not surprise at all - that the most beaten up stocks/sectors were yesterday's best performers.....
Heck - even Glencore rallied strongly after they came out and denied all rumors of their impending demise.....And just look at all the good news now about the beaten up Biotech Sector......Rich Ross of Evercore suggests that this sector could rally 19% - (but he fails to say over what time frame) - considering that it is down 35% off of the July highs.....it is a relatively safe bet as we move into yearend.....
Yesterday's action was NOT unexpected at all..... The major indices all ended the day well within positive territory closing at or near the highs for the day as the window dressing progressed. The Dow surged 236 points (+1.5%), Nasdaq soared 103 points (+2.3%), Russell small cap closed up 16 pts or (+1.55%) and the S&P shot up 36 points (+1.9%) ending the day at 1,920 - very near the resistance we discussed at 1925.....had we had another 10 mins to trade, I think they would have taken it there......
Stocks around the world also enjoyed the company of buyers....Asian stocks led the conga line higher with Europe in tow.... and if all that is not enough - the party continues....Asian mkts began the 4th qtr of 2015 in a happy mood - China - remember that big bad monster lurking - well that gov't 'surprised' mkts by reporting a much stronger PMI number....they reported 49.8 (Just a hair below 50). Now remember - the preliminary Caixin/Markit PMI report from last week had that number at 47 - (extremely weak)....so last night's 'official report' runs counter to the independent report. And guess what else - this morning we learn that starting this month (October) that very same 'flash' report produced by Caixin Media/Markit Economics will be 'discontinued'. Apparently - the gov't does not like the quality of the report - it makes them look bad - and no one is talking about exactly why this report has been 'discontinued'. In fact - Laura Davis - Singapore based spokeswoman for Markit - conveniently 'declined to comment' on this development..... Whatever.....it's always a matter of knowing who you're bed with.....
Was the action just a simple technical rebound, as many of the indexes were trading at or near their August sell-off lows? The big banks went to work while asset managers did take advantage of the lower prices thrust upon us during the last month.....and the buying action did exactly what else you would expect.....it forced the short sellers to run for cover - which only adds fuel to the fire.......
Now - unless there has been a real change of heart and mkt psyche - yesterday's action is why rallies in bear markets don’t usually last too long... Look we are still a long way away from being anywhere near the rapidly descending 50 dma, 100 dma and 200 dma. Technically now the mkt needs to test and retest support and resistance - and this looks like it is creating a stair step' technical pattern - a pattern that is moving in the wrong direction.
US futures this morning are surging higher again...currently up 10 pts - which would put the S&P up and thru the 1925 resistance level.........but let's see if it holds.........
***News Flash: Congress voted to avert a shutdown in the 11th hour last night as they passed a stop gap measure to keep us funded until Dec 11th - that was awful good of them, no?****
Back to stocks.....The chart does tell us that if we pierce 1925 - then a test of the 1950 level is within reach....remember this was a level that the mkt toyed with for a couple of weeks - playing both sides o this fence as it tried to regain stability.... and then the most recent sell off that began Sept 22nd failed to hold and took us once again to test the August lows of 1860 ish.....so now a tight range of 1860/1950 is where we are.
I suppose today's China report will cause some of the negative chatter to subside as analysts and strategists re-work their commentary....but the fact still remains....What about our own US macro data? What about the FED's desires? What will earnings say and what will CEO's, CFO's say about the future?
Yesterday we also got some more US centric data.....ADP reported that we created 200k jobs in September saying that
"Businesses with more than 1,000 employees contributed over half of the job gains in September, despite weakness in energy and manufacturing,"
Friday we will get the 'official US gov't report on job creation...... This is the report that the FED loves to show off...this is the one that shows how the unemployment rate is an incredible 5.1% - THE level where they should begin to normalize their monetary policy - read: raise interest rates. I am just curious....is anyone, I mean anyone going to address the issue of the nearly 100 mil people who are able bodied and of working age yet and unemployed? What will Janet or Stanley, or Bill, Rich or anyone.....say about one of the lowest modern era labor participation rates in history?
Shouldn't we really be focused on the U6 rate (10.3%) vs. the U3 rate (5.1%)? Is the U3 rate really a smoke screen? Do we use this lower rate because it makes elected officials feel better? I mean does anyone have a good therapist that I could talk to?
And what is going on in Windy City? Yesterday they reported the Chicago PMI - this is a direct reflection of manufacturing in that city.....and it was not pretty at all. They reported it at 48.7.....down from 54.4 in August....and a reading below 50 is contractionary..... September’s number was of particular interest because the Production Index subset dropped to 43.6 from 59.0 in August - this is the lowest reading in production levels since July 2009! Now what makes this all the more important - is that for the first time since the recession of 2009, all 6 major Fed regional activity surveys have fallen into the contraction zone. Doesn't sound so robust to me - and then remember that the FED has sent out the troops to further confuse the mkts.....I mean on Monday Chicago Fed President Charles Evans said
“if things were to weaken very much the Fed would need to deliver more stimulus".
What? The US economy is strong, isn't it? Utter confusion really because one day they are talking about raising interest rates and the next day they are talking stimulus. I really need to talk to that therapist!
Overnight in Asia - mkt continued to party....like its 1999! BoJ released their qtrly Tankan Survey - which slightly disappointed yet HSBC's Economist - Izumi Devalier told CNBC that:
"The BoJ should be pretty happy with these results. The deterioration in business sentiment was fully expected and it seems that the Boj seems to have written off investor production and exports, at least in the near term so that's not eh real surprise.....they will focus on the relatively strong non manufacturing number which they think is more important..."
Add in the great China data and the music played on....Japan + 1.92%, Hong Kong +1.4%, China +0.48% and ASX +1.8%.
In Europe this morning mkts are carrying on as well....Kicking off the 4th qtr with a BANG! Gloomy reports? Who cares? China weakness - NOT, Japan Tankan - no problem. US FED - who? Earnings - no worries..... You gotta love it.....FTSE +1.32%, CAC 40 + 0.89%, DAX + 0.04% EUROSTOXX +0.53%, SPAIN +1.58% and ITALY + 0.30%.
The futures are waffling a bit....now up only 7 pts as we inch closer to the opening....any decisive move above 1925 should set off the BUY algo's which will try and test 1950....I suspect though that there will be plenty of sellers lining up at the 1935 level and higher.....It will be important to feel the tone of today and listen to the chatter on the media to see the ratio of bulls to bears now....A close above 1925 would be a short term positive.....Stay tuned.
It is simple to make and great to serve to your dinner guests.
You need: Sweet Italian sausage out of the casing, 2 or 3 large onions, olive oil, butter, dry white wine, heavy cream (you can use lite if you wish), fresh grated Parmegiana cheese, s&p and that's it.
Begin by melting a stick of butter in a large sauce pan...with a splash of olive oil. Now slice the onions and sauté until translucent - about 10 mins.....Now add in the sweet sausage and brown.
Once cooked - bath the sausage in the white wine...just enough to cover the sausage - bring to a boil then reduce heat to med and allow the alcohol to burn off.......... Turn off the heat.
Now bring a pot of salted water to a rolling boil. Add in the medium size shells and cook until aldente. 8 - 10 mins.
Now add the heavy cream to the sausage and stir. Next - a handful or two of the cheese and mix well.
Strain - always reserving a mugful of pasta water. Put the pasta back in the pot and add back some of the water to moisten....Now add some of the sauce to the pasta and mix. Serve in warmed bowls - add one more ladle of the sauce on top. Enjoy this just as is.
Buon Appetito.
As the curtain closed on the 3rd qtr of 2015 - investors/traders took stocks - around the world - higher as asset managers went on a shopping spree taking advantage of the sale that was created during September. It is not surprise at all - that the most beaten up stocks/sectors were yesterday's best performers.....
Heck - even Glencore rallied strongly after they came out and denied all rumors of their impending demise.....And just look at all the good news now about the beaten up Biotech Sector......Rich Ross of Evercore suggests that this sector could rally 19% - (but he fails to say over what time frame) - considering that it is down 35% off of the July highs.....it is a relatively safe bet as we move into yearend.....
Yesterday's action was NOT unexpected at all..... The major indices all ended the day well within positive territory closing at or near the highs for the day as the window dressing progressed. The Dow surged 236 points (+1.5%), Nasdaq soared 103 points (+2.3%), Russell small cap closed up 16 pts or (+1.55%) and the S&P shot up 36 points (+1.9%) ending the day at 1,920 - very near the resistance we discussed at 1925.....had we had another 10 mins to trade, I think they would have taken it there......
Stocks around the world also enjoyed the company of buyers....Asian stocks led the conga line higher with Europe in tow.... and if all that is not enough - the party continues....Asian mkts began the 4th qtr of 2015 in a happy mood - China - remember that big bad monster lurking - well that gov't 'surprised' mkts by reporting a much stronger PMI number....they reported 49.8 (Just a hair below 50). Now remember - the preliminary Caixin/Markit PMI report from last week had that number at 47 - (extremely weak)....so last night's 'official report' runs counter to the independent report. And guess what else - this morning we learn that starting this month (October) that very same 'flash' report produced by Caixin Media/Markit Economics will be 'discontinued'. Apparently - the gov't does not like the quality of the report - it makes them look bad - and no one is talking about exactly why this report has been 'discontinued'. In fact - Laura Davis - Singapore based spokeswoman for Markit - conveniently 'declined to comment' on this development..... Whatever.....it's always a matter of knowing who you're bed with.....
Was the action just a simple technical rebound, as many of the indexes were trading at or near their August sell-off lows? The big banks went to work while asset managers did take advantage of the lower prices thrust upon us during the last month.....and the buying action did exactly what else you would expect.....it forced the short sellers to run for cover - which only adds fuel to the fire.......
Now - unless there has been a real change of heart and mkt psyche - yesterday's action is why rallies in bear markets don’t usually last too long... Look we are still a long way away from being anywhere near the rapidly descending 50 dma, 100 dma and 200 dma. Technically now the mkt needs to test and retest support and resistance - and this looks like it is creating a stair step' technical pattern - a pattern that is moving in the wrong direction.
US futures this morning are surging higher again...currently up 10 pts - which would put the S&P up and thru the 1925 resistance level.........but let's see if it holds.........
***News Flash: Congress voted to avert a shutdown in the 11th hour last night as they passed a stop gap measure to keep us funded until Dec 11th - that was awful good of them, no?****
Back to stocks.....The chart does tell us that if we pierce 1925 - then a test of the 1950 level is within reach....remember this was a level that the mkt toyed with for a couple of weeks - playing both sides o this fence as it tried to regain stability.... and then the most recent sell off that began Sept 22nd failed to hold and took us once again to test the August lows of 1860 ish.....so now a tight range of 1860/1950 is where we are.
I suppose today's China report will cause some of the negative chatter to subside as analysts and strategists re-work their commentary....but the fact still remains....What about our own US macro data? What about the FED's desires? What will earnings say and what will CEO's, CFO's say about the future?
Yesterday we also got some more US centric data.....ADP reported that we created 200k jobs in September saying that
"Businesses with more than 1,000 employees contributed over half of the job gains in September, despite weakness in energy and manufacturing,"
Friday we will get the 'official US gov't report on job creation...... This is the report that the FED loves to show off...this is the one that shows how the unemployment rate is an incredible 5.1% - THE level where they should begin to normalize their monetary policy - read: raise interest rates. I am just curious....is anyone, I mean anyone going to address the issue of the nearly 100 mil people who are able bodied and of working age yet and unemployed? What will Janet or Stanley, or Bill, Rich or anyone.....say about one of the lowest modern era labor participation rates in history?
Shouldn't we really be focused on the U6 rate (10.3%) vs. the U3 rate (5.1%)? Is the U3 rate really a smoke screen? Do we use this lower rate because it makes elected officials feel better? I mean does anyone have a good therapist that I could talk to?
And what is going on in Windy City? Yesterday they reported the Chicago PMI - this is a direct reflection of manufacturing in that city.....and it was not pretty at all. They reported it at 48.7.....down from 54.4 in August....and a reading below 50 is contractionary..... September’s number was of particular interest because the Production Index subset dropped to 43.6 from 59.0 in August - this is the lowest reading in production levels since July 2009! Now what makes this all the more important - is that for the first time since the recession of 2009, all 6 major Fed regional activity surveys have fallen into the contraction zone. Doesn't sound so robust to me - and then remember that the FED has sent out the troops to further confuse the mkts.....I mean on Monday Chicago Fed President Charles Evans said
“if things were to weaken very much the Fed would need to deliver more stimulus".
What? The US economy is strong, isn't it? Utter confusion really because one day they are talking about raising interest rates and the next day they are talking stimulus. I really need to talk to that therapist!
Overnight in Asia - mkt continued to party....like its 1999! BoJ released their qtrly Tankan Survey - which slightly disappointed yet HSBC's Economist - Izumi Devalier told CNBC that:
"The BoJ should be pretty happy with these results. The deterioration in business sentiment was fully expected and it seems that the Boj seems to have written off investor production and exports, at least in the near term so that's not eh real surprise.....they will focus on the relatively strong non manufacturing number which they think is more important..."
Add in the great China data and the music played on....Japan + 1.92%, Hong Kong +1.4%, China +0.48% and ASX +1.8%.
In Europe this morning mkts are carrying on as well....Kicking off the 4th qtr with a BANG! Gloomy reports? Who cares? China weakness - NOT, Japan Tankan - no problem. US FED - who? Earnings - no worries..... You gotta love it.....FTSE +1.32%, CAC 40 + 0.89%, DAX + 0.04% EUROSTOXX +0.53%, SPAIN +1.58% and ITALY + 0.30%.
The futures are waffling a bit....now up only 7 pts as we inch closer to the opening....any decisive move above 1925 should set off the BUY algo's which will try and test 1950....I suspect though that there will be plenty of sellers lining up at the 1935 level and higher.....It will be important to feel the tone of today and listen to the chatter on the media to see the ratio of bulls to bears now....A close above 1925 would be a short term positive.....Stay tuned.
Shells in a White Wine, Sausage & Cream Sauce
This is one of my favorites and will soon be one of yours...It is simple to make and great to serve to your dinner guests.
You need: Sweet Italian sausage out of the casing, 2 or 3 large onions, olive oil, butter, dry white wine, heavy cream (you can use lite if you wish), fresh grated Parmegiana cheese, s&p and that's it.
Begin by melting a stick of butter in a large sauce pan...with a splash of olive oil. Now slice the onions and sauté until translucent - about 10 mins.....Now add in the sweet sausage and brown.
Once cooked - bath the sausage in the white wine...just enough to cover the sausage - bring to a boil then reduce heat to med and allow the alcohol to burn off.......... Turn off the heat.
Now bring a pot of salted water to a rolling boil. Add in the medium size shells and cook until aldente. 8 - 10 mins.
Now add the heavy cream to the sausage and stir. Next - a handful or two of the cheese and mix well.
Strain - always reserving a mugful of pasta water. Put the pasta back in the pot and add back some of the water to moisten....Now add some of the sauce to the pasta and mix. Serve in warmed bowls - add one more ladle of the sauce on top. Enjoy this just as is.
Buon Appetito.
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