The collision of global markets and social mood

Thursday, July 31, 2014

On Impressing Buyers And Sellers

I remain as unimpressed with the recent downside action as I often am with the upside action.

Futures are down hard this morning, though not quite a full percent. Europe is down over a full percent however. And that may be heading our way.

While volume did expand yesterday, I'll be watching how A/Ds act, which are are not yet showing a market that is ready to crumble.

The 50dma is 1951.71 as of yesterday's close and is rising moderately. If the S&P breaks the 1955.59 swing point, the 50day should be there to break the fall. But what if that breaks.

It looks like 1940s are then the next support -- the 38% Fib level sits at 1944.31 and 1940 has a large volume shelf.

If it needs to be said, I'd love to be impressed by this market to the downside at any time. It would go a long way toward bringing back a dose of reality.

But unless that happens, I'm still looking to be a buyer. Especially if 1955.59 holds.

Meanwhile, Whole Foods may be an early indicator that consumers are not willing to part with their whole paycheck anymore. It closed down over 40% from its all-time high yesterday and is down another 5% in the pre-market.

I want to keep an eye on this company as real estate begins to wobble again (which it is correlated with). The CFO announced that WFM is adding stores with free cash flow and is buying back shares. Buybacks are a fine way to goose EPS but are a waste of cash ahead of a contraction. And for a company to be burning cash on new stores five years into the weakest expansion in history as the liquidity is receding is just plain short sighted.

There is ample room for a bounce in WFM but there are volume areas in the $13-15 that look mighty tempting.

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