Day three of the rotation we have been mentioning since last Friday, eroding confidence and day three of AAPL under the 50dma – what a coincidence. NOT! Stanton Analytics premarket recap: The IMF warned late Monday that the global slowdown is steadily increasing. It prodded Europe and the U.S. to get their respective houses in order. It cut its growth estimate for 2012 to 3.3 percent down from July’s est of 3.5 percent. The world organization predicted a scant better look for 2013 at an estimated growth of 3.6 percent. It will be the slowest year of growth since 2009. It is precisely for this reason that the oil markets have been weakened. The Fund has worries that Europe will not manage it crisis and the U.S. fiscal cliff is reaching its jumping off points. It was determined that the flash crash sell off in the energy complex earlier last week was the result of a large producer hedge being executed. It apparently involved thousands of OTC options that needed to be delta hedged. Whoosh! On the European front Angela Merkel flew to Greece with words of support but empty handed. She braved the prospect of demonstrations as she is seen by the Greeks as the chief architect of the austerity there and the resulting depression. China’s CPI is expected to show softness in the economy. They also expect Chinese PPI to deliver the sharpest drop since 2009. China has injected $42 billion into their money market through reverse repos.
Morning observations: mts2 (10:37:22): Chatter going around of another Algo mess – Look at GIP charts on P, ANH, CYS, HTS, TWO, XLF, NOK, LVS, MPEL, WFR, XLE.
Premarket, as crude was trading 90.50 – 90.30 area mts2 (07:16:00): Saudi Arabia appeared to declare victory in its fight to drive prices lower, calling the current oil quote acceptable. Prices are now down to adequate levels and called the current price suitable for global eco growth. Still trading 90.50 area at 10:00CT when another Middle East threat hit the wires. Crude prints $92.91 HOD following Stanton Analytics (10:03:35): Israel, Palestinian Territories: Israeli Commander Says Military Action Inevitable A large-scale Israeli operation in Gaza is inevitable because of continued rocket fire into Israel, a senior Israeli commander told the Maariv newspaper Oct. 9, Maan reported. A spokesman for Islamic Jihad’s military wing warned Israel against conducting an operation. The Israeli commander said Israel’s only option to stop rocket attacks was to launch an offensive similar to Operation Cast Lead in 2008.
Tuesday started with 270k ESZ and 1k SPZ traded on Globex, trading range 1454.50 – 1445.50 / Monday’s RTH’s, pit range was 1452.80 – 1448.00, settled at 1449.80 down 5.7 handles. Today’s RTH’s gapped .5 handle lower to 1449.50 – 1449.30 marking the early high followed by 1448.00, 1447.30 before printing 1450.70, HOD at 8:44CT. The Nasdaq, once again weighed, down 22 handles as the Dow was down 17, spoos were down a couple of handles, AAPL was down $10ish by 9:13CT and below the 50dma for the third day in a row. The spoos briefly breached 1450 before fading back as the DJT’s printed new lows down 20ish before extending their lose to test the 5000.00, down 50ish points by 10:15 as crude rips to the upside. The spoos traded under 1447 area, triggering sell stops and sell programs which took the index down sharply with a brief rest near 1441/42 area. There was to be no bounce until a new low of 1437.00 due to all the hype about AAPL. EUBIE (10:49:52): the 06 printed off the 1437 WIDOWMAKER / that look THIN CHOWDER ALL OVER IT EUBIE (11:11:03): AAPL is in APRIL 10th $626 LOWS / YES THATS A 6MOS OLD HIGHS / Gotta BOUNCE IN HERE / 3 STANDARD DEV OUTSIDE OF BBANDS? EVERY CNBC guy says buy it & it goes down. AAPL just rallied $12 bucks, back trading 638. mts2 (13:05:13): /es about to crash into the downtrend line from this morning / 3m chart; downtrend connecting 1453.75 at 545a PT to 1450 at 715a PT to basically 1440 now. After AAPL bottomed at $623.55 it traded back up to $638 area, unch as the spoos quietly stepped higher, topping out at 1442.80 at 2:15 and sold off. The desk thought we would get a rip to the upside and take out some buy stops but the SPZ sold back off to new lows at 1436.20 at 2:35. The broader market showed $1.386 Bil to the sell side on the closing imbalance. On the 3:00 cash close the SPZ traded 1436.70 before trading a new low 1435.50 settling at 1435.90, down 13.9 handles on the day.