Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
The stock market is apparently beyond the monthly employment report swoon and is also being lifted by the continued flow of merger and acquisition news. With M & A starting to surface on a more consistent basis many investors are taking that as a sign of confidence or as a sign of a return to normalcy. We suspect that the markets are deriving some support from G20 statements that seemed to reiterate the prospect of a long period of low interest rates ahead. Clearly the market were also emboldened by favorable UK economic readings overnight but we think a large measure of the bullishness this morning is the result of news that Kraft is interested in acquiring Cadbury and many players think that Hershey might also get involved. With a Chinese company also still expressing interest in acquiring Hummer from GM and some Australian merger talk also seen, the merger and acquisition tilt is certainly alive and well. We have to wonder if investors are confident enough to back away from the Treasury supply that will be auctioned later this morning, which in turn could mean that the bullish track could see a slight rumble strip just ahead of mid session today. On the other hand, if the Treasury action goes off strong that could in another fashion simply give the bull camp yet another bullish fundamental assist.
S&P 500: While the S&P has also managed another new high for the move overnight, the magnitude of the gains in the S&P are somewhat restrained. Ideas that low interest rates will be left in place for a long period of time has combined with merger and acquisition talk and that has apparently helped the market get beyond the somewhat discouraging US employment figures. However, with the September 1st Commitment of Traders with Options report for S&P 500 Stock Index showing the Non-commercial position to be net short 11,886 contracts, with the Non-reportable position net long 38,220 contracts, that made the “combined” spec and fund position net long 26,334 contracts as of early last week. Therefore, the S&P has a minimal net spec long positioning and that could allow for some classic technical buying interest. Near term resistance isn’t seen until 1030.40.
DOW: With another higher high for the move in the September Mini Dow overnight, we suspect that the market is poised to return to the late August highs. Initial resistance in the September Mini Dow is seen at 9,558 but even higher resistance could also be tested up at 9,568 today. In fact, with the September 1st Commitment of Traders with Options report for Dow Jones Index $5 showing the Non-commercial position to be net long 3,605 contracts, with the Non-reportable position net short 6,894 contracts, that made the “combined” spec and fund position net short 3,289 contracts as of early last week and that could leave the market with enough technical buying fuel to extend the rally for the first two trading sessions of the holiday shortened week.
NASDAQ: With another new high for the move, the September Nasdaq starts the new week out on a bullish footing. In fact, with the September 1st Commitment of Traders with Options report for Nasdaq Mini, showing the Non-commercial position to be net short 13,176 contracts, with the Non-reportable position net long 3,484 contracts, that made the “combined” spec and fund position net short 9,692 contracts as of early last week. In other words, the late August/early September washout really knocked the spec long positioning out of the Nasdaq and that would seem to pave the way for a fresh new high for the year, in the coming trading sessions. In fact, just a minor merger and acquisition story in the tech sector under the current bias could really give the bull camp an added boost.
TODAY’S MARKET IDEAS: Mostly upbeat view seems to be coming from mechanical issues like Merger and acquisition instead of from real evidence of recovery.
