Light Stock Market Selling as We Wait on Fed FOMC in Suspense

By: PhilStockWorld

Courtesy of Doug Short: The big week of economic data got off to a weak start, with the S&P 500 slipping 0.37% in a day of light trading within a relatively narrow intraday range of 0.54% (the 16th percentile of intraday volatility for 2013). The markets are in suspense, waiting on the really big news comes later in the week: Wednesday’s Q2 GDP, which will include major revisions back to 1929, and Friday’ June employment report. On Wednesday we also get the latest FOMC statement, although the consensus is for no market-moving news. Meanwhile today’s Pending Home Sales declined less than forecast. On the other hand, the Dallas Fed Manufacturing showed weaker growth than expected.

The US Treasury put today’s closing yield on the 10-year note at 2.61%, up three bps from Friday’s close.

Here’s a 5-minute look at today with the intraday range highlighted. I’ve included the final hours of Friday for context.

Volume today was 26% below its 50-day moving average.

And speaking of light volume, check out the SPY ETF during the July melt-up.

The S&P 500 is now up 18.17% for 2013 and 0.60% below the all-time closing high of July 22.

For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.

- Phil

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

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