And the DNC Begins.....Market has Little Reaction

The city of brotherly love is the site of this year's DNC convention - and the Dems worked very hard at trying to pull it off...I mean - as much as they would have liked their convention to go off without a hitch - that was not meant to be.....The forced resignation of Debbie Wasserman-Shultz (not soon enough) - was the talk of the town yesterday - as it was revealed that under her leadership - the Democratic party tried to subvert one of their own (Bernie Sanders)...in pursuit of continued control of the White House....The night saw Corey Booker ( a clear up and comer) give an impassioned speech - probably the best one of the night - followed by first lady Michelle Obama.  Bernie Sanders closed out the night (taking the high road yet clearly disappointed)  urging his supporters to refrain from the ugliness of a protest.....-  Day 2 begins in 5 hrs....

Stocks turned lower on Monday as traders and  investors got hit with a slew of earnings data, and the realization that there is a glut of crude oil floating around the globe....the glut coupled with 'weaker demand', an increasing active rig count and rising gasoline supply caused crude oil to fall by 2.4%  taking energy stocks with it as well and this is not necessarily a good sign. 

This cast a pall over the broader mkt and gave buyers a reason to pause....The news about rising gasoline supplies caused traders to push that commodity lower (XBA Active Contract)  - testing levels - $131.61- not seen since Jan/March.  A break here could see gasoline go to the $123 range in short order.  The Death Cross is only days away - so a push lower is not out of the question at all as traders try to shake the trees and flush the weak links out....This will continue to keep a lid on equity prices as the summer doldrums roll on....   

Volume continues to be very low....in fact at the lowest levels seen this year as traders/investors appear to be unwilling to take make a bet that the mkt is poised to go higher or much lower at the moment.....in fact - it is the summer churn - ahead of both the FED and the BoJ policy decisions later this week.   Now - some outlets will tell you that sellers dominated the trading - remember - there have to be two sides to a trade - both a buyer and a seller - so I would tell you that the buyers were just a bit more patient - bidding lower - once again testing the will of the sellers....

Now look - the mkt ended the day down 6 pts on the S&P - that is nothing to write home about -so do not read too much into yesterday's action - We are still well within the 2150/2175 trading range that I have been discussing for more than a week now.  I suspect that this will be the case until at least tomorrow at 2 pm - when we hear from the FED about the next plan.....  Will they once again put September out front and on the table or will they continue to be more coy......not really committing but jawboning - testing investor and mkt reaction? 

Is this lack of volume suggesting a topping pattern?  I mean look - after all of the central bank liquidity post BREXIT - is the mkt just a bit ahead of itself?  What catalyst will spark a more sustained reversal or another challenge of the highs?  Will it be politics?  No, Will it be earnings - Not so much - Will it be broader central bank policy decisions - Most likely, Yes...because  it was they who ignited this latest rally - so any sense that they over reacted will cause a re-pricing of equities....If they leave September off the table then look for the mkts to challenge the most recent highs of 2175.....and if they suggest that it's all good and that rates are poised to move - then watch for the correction.....a correction that could take the mkt right back to support at 2100.......which only represents a 3.4% pullback - again well within what we consider 'normal' trading....

Across the Pacific - the mkts are also awaiting news form the BoJ (Bank of Japan) - will Governor Kuroda deliver a new round of stimulus to the Japanese economy or will he hold back?  The tension is building as so many believe that the Japanese economy NEEDS more stimulus.....they are in their 3rd decade of trying to save their economy...at what point do they wipe the slate clean and start over?    Is the Japanese experiment a preview of what is to come for us?   Only time will tell....

Overnight - Japan closed lower as some speculate that Kuroda will disappoint the mkts and NOT launch a significant enough package......PM Abe's response is to inject some 6 tril Yen ($56 bil) in direct fiscal outlays...but this too has disappointed the mkts - as many analysts were hoping for 10 - 20 Tril Yen.. So the mkts await the August 2 decision....

European mkts are mixed as they digest more earnings news and investors patiently await the FED decision tomorrow. 

US futures are flat right now....Earnings today include 3M, CAT, DD, MCD, UTX and VZ to name just a few.....APPL and TWTR will report post close...and as you can expect there is a lot of speculation around Apple......Yesterday saw that stock trade lower and bounce off of its 50 dma at 96.90......ending the day at $97.34. A break below this support will leave it vulnerable to a swift move to $90/sh - the lows of May. 

Eco data today include Cash Shiller Home prices, Markit PMI Services Index, Richmond Fed Survey and New Home Sales...None of which should really cause the mkt to do much at all....Like I said - the focus will be on the DNC (for pure entertainment value) and the FED - for interest rate direction.

Roasted Sea Bass

You will need:  1 lb of Sea Bass, olive oil, butter, onion, Marsala Wine, Fresh wild mushrooms, Chicken stock, s&p, and chopped parsley for color.
 
Prepare by chopping the onion, slicing the mushrooms and chopping the parsley.  Have all other ingredients out on the counter to ease the process of creating this dish....
 
Preheat the oven to 450 degrees - this is important - you want the oven ready and waiting...  
 
In a sauté pan - heat the olive oil and the chopped onion - cook until soft and translucent.  Turn the heat to high to make the pan really hot - then remove the pan from heat and Deglaze with 1/4 cup or so of Marsala Wine - you can use White wine if you prefer - but you will get a different flavor - just fyi.  (I say remove the pan from the heat because  - if you use Marsala - the flame can easily ignite the wine and singe your face. - reg white wine - no worries)   When the wine has cooked off add the sliced mushrooms and about a tblsp of butter.  Reduce heat to med and cook until tender...
 
Now add the chicken stock - maybe 1/2 cup or so....and s&p...let it cool down.....just so it thickens a bit.....
 
In another sauté pan heat up a bit more olive oil...season the filet with s&p and add to the pan skin side down for about 5 mins...you want the skin to be crispy......flip and cook for about 1 min - transfer to a baking dish and put in the pre-heated oven and roast for another 4 / 5 mins. 
 
Warm the serving dishes and place a bed of the onion/mushroom mixture on the plate and then top with the pan roasted filet.  Adorn with a bit of chopped parsley.  You can serve this dish with herb/garlic wild rice and sautéed green beans.  Complement with a cold bottle of Pinot Grigio - Santa Margherita. 

 
 
Buon Appetito.