The market is lower this morning, after Cisco (CSCO) reported results last night that were a little light on the top-line, and also issued cautious guidance. Investors hoped CEO Chambers would be more bullish, but he said that his customers are uncertain right now, and that makes him uncertain as well. That said, I think the -10% move down in the stock today is an overreaction.
In economic news, the jobless claims figures came in higher than expected for the week, reaching their highest level since February. Regardless, the 10-year yield is bouncing from yesterday's new lows at 2.70%, up slightly to 2.74%.
The dollar is higher again today, which is weighing on oil prices ($76.50), but helping boost gold prices to near $1215. Gold did not initially have a positive reaction to the Fed announcement of further monetary accommodation, but it seems to be having a delayed positive reaction today.
Asian markets were lower overnight, and Europe is mixed so far today. The volatility index (VIX) is flat right now, after rising to its 50-day average yesterday. It is currently at 25.30.
Trading comment: I had been commenting that as long as the S&P 500 stayed above its 200-day average, that looked bullish. But the price action yesterday negated that scenario, and now the SPX has sliced below both its 200-day as well as its 50-day average. As such, the near-term uptrend has been broken, and that former level of support at SPX 1115 now stands out as resistance.
As such, I want to hold off on new buys right now, and even look to trim marginal positions if we get a bounce back towards SPX 1115. The market rallied for about 6 weeks from the early July lows, so it could be that it needs to consolidate our pullback before another good buying opportunity is upon us, possibly for Q4.
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