The collision of global markets and social mood

Thursday, November 5, 2015

Thursday -- Still Thinking Higher

S&P E-mini Futures:
Overnight bounce.

Plenty o' news today, neatly listed courtesy of Zero Hedge. Take your pick.

7:30am: Challenger Job Cuts y/y, Oct. (prior 93.2%)
8:30am: Initial Jobless Claims, Oct. 31, est. 262k (prior 260k)
Continuing Claims, Oct. 24, est. 2.140m (prior 2.144m)
8:30am: Non-farm Productivity, 3Q P, est. -0.3% (prior 3.3%)
Unit Labor Costs, 3Q P, est. 2.5% (prior -1.4%)
9:45am: Bloomberg Consumer Comfort, Nov. 1 (prior 42.8)

7:00am: Bank of England bank rate, est. 0.50% (prior 0.50%)
7:45am: BOE’s Carney holds news conference
8:30am: Fed’s Harker speaks in Philadelphia
8:30am: Fed’s Dudley and Fischer and IMF’s Lagarde speak in New York
12:45pm: Fed’s Tarullo speaks in Chicago
1:30pm: Fed’s Lockhart speaks in Bern, Switzerland
7:30pm: Reserve Bank of Australia issues monetary policy statement
11:00pm: Bank of Japan’s Kuroda speaks in Tokyo

This is day two of full-on central bank speak-o-rama. Central banks seem to be in "Baffle 'em with bullshit" mode.

Everything looks rosy at the Facebook which reported stellar earnings last night. They are giving a graduate course in the power of a compelling advertising channel. Media buyers (who hold the purse strings of the entire ad industry) can target consumers down to the most granular level ever. To them, effective targeting is the Holy Grail.

This does two things in my opinion: it exemplifies why Twitter is doomed to be the Wikipedia of social media. Everyone uses it, but it's not monetize-able.

Conversely, it means the Facebook will probably buy Twitter when the valuation makes more sense.

Twitter has already allowed a non-removable "Connect to (the) Facebook" app in its user settings, and just days ago changed its "favorite" button to a more (the) Facebook-style "heart" button. (It will always be the Facebook to me)

Both are hints that Twitter and the Facebook are dancing together behind the scenes and will continue to.

For the Facebook not to take over Twitter would be a strategic blunder (to work in synergy with Instagram, What's App, and possibly Pinterest in the future). Yet current valuations suggest a Twitter acquisition would also be seen by the Board Of Directors as a blunder. Just my opinion.

GBP hammered as BOE stands firm on rates. NOK getting a boost by doing the same with theirs, backed up by strong data (factory orders & industrial production) as Brent crude oil prices have firmed.

Prices look like they're trying to bounce, yet there has been lots of volume to the downside as Fed speakers continue to set the table for higher rates.

WTI crude looking more and more like it's building a triangle before lower prices. NG currently up 2% ahead of EIA storage numbers today.

Gold, silver, and copper looking shaky, yet gold showing the best relative strength.

S&P Outlook:
2097.51 didn't hold, but I think it may have been too tight a stop. The action was very choppy, and appears corrective. The original stop level -- 2079.34 -- is probably the better one.

In other words, the higher stop was for what appeared to be a budding impulse, yet price could be forming a rising wedge (which allows for overlaps).

Markets are fluid. Wave counts must continuously change. Stops are good places to step aside and think with a clear head.

I still think there may be one more probe to a new recovery high before a tradeable test lower.

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