After noting 3 recent weak economic data points (ISM manufacturing, Jobs & ISM Services) we have had a couple of firm ones in Job Openings and Jobless Claims. Such is this market. It appears that anxiety of a rate hike is inching up as Treasury bonds and precious metals sag and the stock market comes under minor pressure.
With FOMC this month, I’d say we are data dependent regarding how the market will react (said Captain Obvious). The thing is, the data are jumping around, making this a tough call. Economic reports are pretty much done for this week, but next week will have some potentially market moving items, pre-FOMC week. Thursday in particular, will be a big one with Retail Sales, PPI, Philly Fed and Empire Manufacturing, among other things.
With interest rates (and the US dollar) inching up on the most recent data, TLT is waffling at the 50 day averages.
HUI has been capped the last couple days at the lower end of the bounce target (250). We have noted that if this is a bounce only, a future hit of the SMA 200 (192 and rising) could be seen. If this is more than a bounce, another leg higher could spring from the support at 220. Next week’s data should be telling about FOMC’s bias the week after that (Sept. 21).
SPX continues its uninspiring sideways trend. We noted that the indexes have found support at the 50 day averages, but 2100 (+/-) is major support.
If I could predict what the data will say* I’d lay odds on FOMC. Had the data continued in the manner of the [weak] ISM and Jobs, I’d say odds would be 100% against a hike. Now a couple of firm data points have at least kept the discussion open. In an atmosphere like this, understand if you are an investor, trader or some hybrid. I remain in hybrid mode considering the backdrop.
* Since I cannot predict, the above is presented as a perspective ‘snapshot’ on the general situation.