The DOW made it 7 in a row setting another record closing high and once again, the rest of the market did not participate, with the S&P, NASDAQ and Russell 2000 down on the day, while the Transports managed to eke out a small gain. I am not exactly sure why Money Managers, continue to pile into some of the Big Cap names of the DOW, but I am sure that the weak U.S. Dollar, is helping some of the Multinationals make sales overseas. The problem is that with the Dollar already down 10% in 2017, the odds of it dropping another 10%, are not great and when it does turn up, things will get ugly fast, as Money Managers all head for the exits at the same time.
In the meantime, Special Council Robert Mueller, is impaneling a Grand Jury to help with the Russian probe and so far, the markets are not impressed, even though a Grand Jury would be able to subpoena various documents, like let’s say, the President’s Tax Returns. Anyway, for now, no one cares, even though the DOW keeps rising, while the rest of the markets look tired and could really use a correction. How this plays out no one knows, but the DOW can’t keep going higher, with the rest of the market going the other way.
Technically the DOW is off the chart overbought, the S&P and NASDAQ are close to being oversold, while the Russell and Transports are oversold and anything could trigger a rally in those Indexes. The problem is that lately, when stocks and Indexes, start in one direction, they continue in that direction, mainly because of Machine Trading. It seems that Machines don’t care, that a stock or Index, can get overbought or oversold and unlike a Human Being, that don’t mind chasing prices higher, or blasting stocks lower. Everyone on Wall Street, knows that this is not a good thing, but as long as the Machines generate cash and cost little to run, no one cares, but everyone on Wall Street also knows, that at some time soon, this will all blow up, so the only question is when.
Overnight, the Global markets were quietly mixed, as Investors are digesting the Mueller Grand Jury and waiting for today’s Jobs report. Lately the Economic data has been weaker than expected, so any disappointment in today’s numbers, could keep the FED on the sidelines for the rest of 2017. In early trading this morning the DOW is up 36pts, the Yield on the 10 Yr keeps ticking down now at 2.23%, the Dollar keeps falling and Commodities are mixed with Oil lower and Gold, Silver and Copper higher.
The Jobs numbers are out at 8:30 and the Street is expecting around 180,000 new jobs and more importantly a 0.3% increase in Wages, these numbers are important so PAY ATTENTION.
Today’s Early Markets
DOW Futures— up 36.00 London – up 5.58
S&P – up 300 DAX – up 28.56
GOLD—$1275 Sept Nikkei — down 79.84
OIL— $48.69 Sept HangSeng — up 31.78
DOW RESISTANCE 22,100 S&P RESISTANCE 2482
DOW SUPPORT: 21,960 S&P SUPPORT: 2466
$NASDAQ RESISTANCE 6380
$NASDAQ SUPPORT 6310