Market Commentary: Markets Opened Up, Then Melt Down On Low Volume

by Gary

Opening Market Commentary For 11-01-2013

Premarkets were up 0.10% this morning after the Markit US PMI Final (Oct) reported a +1.00% decrease.

Markets opened up +0.12% and climbed to +0.35% on relatively heavy green volume just before the US ISM Manufacturing (Oct) was reported at 56.4 versus 55.0 expected and 56.2 prior. The averages did nothing, maybe a tick up, but the volume fell. Of course a good economy is not good news for more of the Fed’s ‘Market Viagra’ and after a few minutes the averages started to falter after a brief rise when the investors at large decided to sell some of their holdings.

By 10:15 the averages were headed down as the financial reports this morning were to good and the HFT computers started dumping.

In reality there are no human investors or traders in today’s action. When the volume is this low it is all HFT computers at work.

US economy improving say the politicians? It doesn’t look all that good and almost assures the Fed tapering won’t start until March 2014.

Final US Manufacturing PMI Prints At Lowest In One Year, Makes Mockery Of Chicago “Data”

If anyone needed confirmation that yesterday’s soaring Chicago PMI data (to the highest since March 2011) was a typical “Made In Chicago” fabrication, then look no further than today’s final Markit US Manufacturing PMI.

. . . which instead of soaring as its Chicago counterpart, tumbled from 52.8 to 51.8, the lowest print since October of 2012 as the report indicated “only modest improvement in business conditions”, “output growth weakest for over four years“, and “new orders increasing at the slowest pace since April.”

Then again, in the New Normal world in which data reports separated by 24 hours are expected to indicate diametrically opposite things, this is quite normal, and if nothing else, absolutely bullish.

Why? Who knows, but cratering Manufacturing Output is surely beneficial to the stock market, if not the actual economy.

Headline: “US Manufacturing strongest in 2 1/2 years as US Government Shuts Down.”

Manufacturing ISM Prints At Highest Since April 2011; “No Impact From Government Shutdown”

So much for the government shutdown – as one of the just released manufacturing ISM respondents so candidly put it, “The government shutdown has not had any impact on our business that I can determine, nor has it impacted any supplier shipments.”

Sadly, it was not 66.4 or 76.4 to at least partially “confirm” the Chicago ISM surge. So while virtually all ISM components rose, with exports spiking by 5 points to 57.0, it was the employment index that dipped yet again, from 55.4 to 53.2, the lowest since June, but in the New Normal who needs jobs when one has Schrodinger diffusion indices to confuse everyone on a daily basis.

Either way, while stocks did not like yesterday’s exploding Chicago PMI and dipped on fears of a December taper, today’s 2 years ISM high is one of those good news is good news instances, and ES soars as usual.

The DOW at 10:15 is at 15581 up 37 or 0.24%.

The SP500 is at 1758 up 1.49 or 0.09%.

SPY is at 175.88 up 0.06 or 0.02%.

The $RUT is at 1095 down 5 or -0.46%.

NASDAQ is at 3919 down 0.01 or 0.00%.

NASDAQ 100 is at 3378 up 0.60 or 0.02%.

The longer trend is up, the past months trend is bullish, the past 5 sessions have been sideways and the current bias is negative.

How Oil Really Gets Priced

WTI oil is trading between 96.64 and 94.98 today. The session bias is negative and is currently trading down at 95.08.

Brent Crude is trading between 109.35 and 106.64 today. The session bias is negative and is currently trading down at 106.84.

Gold fell from 1327.28 earlier to 1305.84 and is currently trading down at 1306.90.

Here’s why copper has lost its indicator role

Dr. Copper is at 3.296 falling from 3.325 earlier.

The US dollar is trading between 80.35 and 80.83 and is currently trading up at 80.82, the bias is currently positive.

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Written by Gary