Tuesday, May 5, 2009

Morning Update/ Market Thread 5/5

Good Morning,

Futures are down slightly with the /ES sitting right on 900:

Adidas reported that profits were down 97%. Kraft earning rose 10%. GM says that car sales in China jumped 50%! I’m sure that there is a lot of growth to be had there, but increasing demand won’t be coming from the rest of the world for some time.

Meanwhile ICSC same store sales rose .7% last week but was down .8% year over year. Redbook chain store sales rose year over year by .3% after rising .7% the week prior. Non-manufacturing ISM comes out at 10 Eastern, the same time Bernanke is scheduled to speak.

The market is insanely overbought as the percentage of stocks above their 50 day moving average indicates – by far the highest in the past year:

The AAA CMBX index has come up in price slightly:

But the lower tier stuff is still way down there and spreads are still at historic highs:

Other indicators, such as LIBOR, have come in significantly.

The next pivot point is at 912. I’d be willing to bet that it holds today, especially being overbought on all the short term indicators. The percent of stocks above their 5 day average is insane again, that is one of the precursors of significant declines, although the last time we had that condition was during this rally and we did not get the expected pullback, obviously.

That’s about it, have a great day,