The market rallied nicely yesterday, but volume was again quite low. That's how it often is in August, as traders and portfolio managers get their summer vacations in prior to September, when things kick into high gear again.
Target (TGT) and Deere (DE) both reported earnings this morning, and both earnings reports were good. But TGT stock is higher while DE is lower. Of course, DE has had a much bigger rally, so this is likely just profit taking. I hope that DE pulls back more, as I view it as an attractive play on the ag cycle.
The dollar is firm in early trade, which could be weighing on commodities. Gold prices are lower to $1218 and oil prices are down again to $74.40. With all the talk about Iran, hurricanes, etc., one would think that oil would be trading better.
Among the sector ETFs, financials are firm (+0.35%), while energy is lagging (-1.46%).
Asia was mixed overnight, with Japan higher but China lower; the 10-year yield is down a bit to 2.61%; and the VIX is up to 24.37.
Trading comment: Yesterday's rally was nice, but again it doesn't really change the intermediate-term picture yet. I would still need to see the S&P rally over its 200-day (currently at 1116) to change my near-term cautiousness. The market is still bouncing from its oversold condition, but if it can't get through some of this overhead resistance, another move lower is probable.
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