It's great that futures are strongly higher this morning; I bought some SPY 175 calls expiring December during the late afternoon smack down, but I don't like the way the 10-year note is acting. I understand why the 1-month Treasury bill is selling off, but the 10-year is getting me concerned.
Also concerning is the fact that JP Morgan, Wells Fargo, Citi, and now Bank Of America have each reported weak earnings reports. This fact may slip through the cracks during all the Washington drama and it should not.
Oil has fallen 8% since the end of August. Maybe it's just the end of the summer driving season. Maybe it's not.
David Rosenberg noted that September US auto sales fell to a five month low, and was mindful that GAP same store sales fell 3% last month.
It's starting to feel as though no matter what happens in Washington over the next day, two, or several, the economy is sending warning signs.
Meanwhile on Fast Money yesterday I heard a stockbroker say that market breadth was "absolutely fantastic" even as I mentioned that new 52-week high-low difference is running 77% lower that the peak of 2010. In fact, as he was spewing that the market was at highs with an inverted A/D ratio of nearly 2:1 before it sold off.
None of this precludes new all-time highs. But it could be difficult to maintain them.
Personally I'd like to see the S&P make a deep retracement between now and Friday. 1670 would do it. I'm holding the calls in case it doesn't.
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