Mixed-to-bearish reports and a “nearly there” technical platform tests bulls for durability Friday. As of 10:35 ET the SP-500 (SPY) is off by a narrow 0.05% as a double top varietal continues to find bulls and bears harvesting around the 1400 level for support.
Across-the-pond, a disappointing Greek diplomatic roadshow has continued Friday as the country’s PM met with German Chancellor Merkel. Following Germany’s finance minister stating the Eurozone was at its economic limit for aid to Greece, Merkel has nixed any hopes for time concessions to help the country narrow it’s “fiscal deficit and the deficit in confidence”, but did stress she would like to see Greece remain in the Euro.
Elsewhere, the UK saw a modest improvement to its revised Q2 GDP from a prior decline of 0.7% to -0.5%. Across the other pond, financial rag gossip from the Shanghai Daily wrote that China's policymakers may consider additional stimulus measures and increased control of its housing market. Asian markets though closed lower as a report inflation may rise to 2.8% and a cut to China’s 2012 GDP from 8.4% to 8.0% and 8.8% to 8.5% for 2013 by analysts at HSBC appeared to find stronger favor with investors.
Stateside economic data has been limited to a mixed report on durable goods for July. Total orders for the period easily topped forecasts of 2.5% and built upon June’s upwardly-revised reading of 1.6%. However, axing the transportation component yielded a bearish contrast as orders fell by 0.4% compared to estimates of an increase of 0.6%, with a downward revision of 0.8% to -2.2% for June.
In those intertwined markets of notice and sometimes influence, Eurozone country ETF’s for Germany (EWG), Spain (EWP) and Italy (EWI) are off about 0.50% to 1.0%, while the EUR/USD takes a 0.4% breather after establishing a fierce upside run to confirm its daily up-channel. For bullish contrarians, in the face of a disappointing diplomatic roadshow, the Global X FTSE Greece 20 ETF (GREK) is reclaiming all of Thursday’s losses and piling on 1.7% near the highs of its two month lateral base.
The Greenback (UUP) is up 0.30% and confirming Thursday’s 200SMA piercing hammer as a potential key low. And despite the dollar’s technical strength, the commodity complex is displaying modest relative strength of its own, led by black gold (USO). Shares of the oil proxy are up 0.55% as bulls try to shake off Thursday’s bearish reversal below the 200SMA.
Silver (SLV) is up narrowly by 0.30%. Price action is confined to inside trade following yesterday’s 2.35% gain and daily doji decision candle which closed squarely on the 200SMA. At the same time, gold (GLD) is off 0.15% but also caught in an inside candle but one above the 200SMA following Thursday’s gap bid of 0.84%. Disclosure: Analyst maintains an adjusted bull call spread.
And for a second session in a row, one commoditized product slightly less sweet with investors is Apple (AAPL). Intraday, shares of AAPL are off 0.15%, but on par with the broader market’s modest loss after reversing out-the-gate relative weakness with the stock remaining above prior resistance of a possible double top varietal.
On the corporate confessional side, shares of Naz’ 100 constituent Autodesk (ADSK) are off 16% but rebounding aggressively from a possible undercut lower-low double bottom pattern. The company announced a top and bottom-line miss and complimented the report by issuing a below-views Q3 outlook.
For the bulls, smaller cap tech outfits Aruba Networks (ARUN) and Micros Systems (MCRS) are up 17% and 9% respectively following overall pleasing reports.
And shares of Salesforce.com (CRM) are currently pleasing option hedge hogs either flat or short vega risk as an opening loss of about 5% has reversed into a flat performance on the day. The volatile reversal comes on the heels of a very mixed report which included a three cent beat, in-line sales, below views Q3 EPS outlook, above views Q3 revenues, in-line FY13 earnings and above views revenue guidance.
Finally and in those sometimes accurate heat-seeking option markets, the VIX ($VIX) is off marginally by 1.85% near 15.65% as bulls try and decide what kind of weekend risk their in the mood for; i.e. the fear of missing out or plain and simple, garden variety fear. At current levels, the sentiment gauge is back in its more historically normalized range of 15% to the low 20s after testing three week highs Thursday and getting to a “nearly there” fearful 10SMA differential of 12.25%.
Senior Options Writer, former Market Maker & fulltime Option Hedge Hog Advocate
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