Market Recon Thursday

Good Morning,
                       Remember when I told you that I did not think that the S&P 500 could hold that trend line yesterday…..the one that actually began on Thursday afternoon just after the highly touted 1812 level had been punctured ??  Well, on a Wednesday that started out with us talking about WTI Crude testing $30 resistance, the S&P 500 not only held the trend line, the index spent most of the day nearer to the top of the channel than it did bouncing around….oh, and btw… WTI Crude is trading closer to 32 than it is to 31 while I bang out this note.  Four and a half day parabolic move higher ??  Anything can happen here on planet Earth.  I’ll let you know at 4pm.
                       We do have some nice macro to look at today, and obviously, pricing movements for Crude will be key, but WMT reports this morning.  WMT, a firm well established in the old economy, while trying to evolve as a competitor in the new.  This one is paramount in my opinion.  As you most likely know, the retailers report late in the season, and we’ll be hit with a plethora of them over the next week and a half.  Now, (brain power activate) remember, when January Core Retail Sales beat last Friday, the Census Bureau (That’s right, the Census Bureau) revised December Core numbers from -0.1% to +0.1%.  May not seem like much, but it paints the holiday season in a much different light.  I do not have a position in this space, so I’m not trying to sell you anything.  That said, I do believe that the retailers, at least in the short term will likely take some leadership in US equity market direction starting today with that release.
                       So, although the correlation does seem to take days off as seen on Tuesday, Crude matters. Technical analysis (Newton !!) has been important, that’s plain to see.  Do fundamentals still matter ??  Yes.  A thousand times yes.  The short covering witnessed yesterday was a fundamental force.  These retail numbers that we have seen, and are about to see more of, certainly have fundamental impact…. and the profit taking that we inevitably have to see at some point, perhaps today…. will be a fundamental shift in the demand/supply equation that in a healthy market results in price discovery.  Ahhh, price discovery….. now that’s an argument for a different day.
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Bumps in Your Road
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08:30 ET
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Initial Jobless Claims (Weekly): Last week, we witnessed a pleasant drop in the numbers of those filing for Unemployment benefits.  This item had been knocking on 300K’s door, but backed off nicely to 269K.  Expectations for today are that the number drifts slightly higher to something close to 275K, which would still improve the four week moving average (currently a smidge above 281K) going forward.
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Philly Fed Manufacturing Index (February):  This item is just about the most highly focused upon of all of the regional Fed manufacturing prints.  It had also been the most consistently expansionary until the last half year or so, when this item started to falter, just like all of it’s siblings.  Consensus opinion for today is for a -2.7ish release.  If so, this will be the fifth month in six that Philly hits the tape in a state of contraction.  To this point, Philly has avoided an outright cataclysmic number in a any one month, like what we’ve seen in New York, and Dallas.
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10:00 ET
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Leading Indicators (January):  Pass.  Nobody looks at this one.  Nobody ever has.  As a trader, you can save your intellectual capital for something else.
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10:30 ET
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Natural Gas Inventories (Weekly):  Nat Gas is coming off of last week’s draw of 70 billion cubic feet, which was the eleventh consecutive weekly contraction in this space.  Expect to see the draw double or so this week, and get back to what we had been seeing two weeks ago.
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11:00 ET
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Oil Inventories (Weekly):  Crude inventories dropped to the tune of -800K barrels last week.  That was a surprise as most of the Street was looking for something more like an increase of 4 million barrels or so.  Today, again…the Street looks for a sizable increase.  Expectations are for 3.6 to 4 million barrels again.  The Rig Count has been dropping rapidly.  My gut tells me that today’s print will be smaller than expected.  We’ll see.
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15:30 ET
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Fed Speaker:  San Francisco Fed Pres. John Williams (No relation to Fightin’ Dave, the precious metals expert) is set to speak on our economic outlook from Los Angeles, California.  Williams was hinting on the Fed slowing it’s pace on interest rate hikes way back in January (like, way before it was cool), and has been out of the news ever since.  He is not a voting member of the FOMC this year.
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Thursday’s Earnings Highlights
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Before the Open: BCC (.23), DUK (.90), ETR (1.45), WMT (1.42), WM (.68)
After the Close: ED(.54), MRVL (.10), JWN (1.25)
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PS: Life is scary.  That said…..United We Stand.  Never leave someone who hasn’t given up behind.  Never.