Market Recon Wednesday.

Good Morning,
                     Take a look at a medium length (five weeks) chart for S&P 500 cash. What you’ll see is resistance at 2193 that has been met and sharply repulsed twice within two weeks. You’ll also see a series of higher lows starting in early August. With Relative Strength almost completely neutral, and a MACD that’s not really helpful….to me, this looks like pennant formation that’s set to close very shortly. Maybe as shortly as Janet Yellen’s scheduled 10am speech from Jackson Hole on Friday. Violent move for equities in the wake of that speech? I don’t have a crystal ball, but the chart says this is likely. Direction? That’s up to the Fed Chair. The formation has an upward bias, but will be outweighed by her words.
                     You’ll notice a much stronger British Pound this morning versus both the US Dollar, and the Euro. This has everything to do with the health of the Bank of England’s quantitative easing program. The BOE made public the results of their most recent reverse auction for securities with maturities in excess of 15 years.  Remember the first reverse auction after the QE announcement made by the BOE in the wake of Brexit? The one with the bid to cover of 0.96? Well, things did get better after that, but suddenly demand (which is actually created by the sellers in this case) waned again. In yesterday’s results, B/C was just 1.54, which is just a little too close for comfort. A fear of a possible failure of the BOE’s quantitative easing program to either function correctly, or at some point even continue at all has obviously put this bid under the Pound today.
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Macro
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09:00 – FHFA HPI (June): Expecting 0.3%, May 0.2% m/m. This is basically a non-event in the macro world. We have two HPI’s, and Case-Shiller is the one traders look at. That one is due on Tuesday. Both are somewhat dated, released with a two month lag. The reason for the lack of interest in this item is it’s narrow scope as only single family homes with mortgages backed by Freddie Mac, and Fannie Mae are tracked.
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10:00 – Existing Home Sales (July): Expecting 5.52M, June 5.57M SAAR.  Like New Home Sales, Existing Home Sales have been running at the top end of the range. Like New Home Sales, the street is looking for a mild contraction in this print. Due to the shocking upside beat in that space yesterday, you can hardly doubt such an occurrence in this space today. Unlike New Home Sales, Existing Home Sales have printed in this neighborhood on and off a few times throughout the recovery, without being able to break through. Existing Home Sales represent the lion’s share of the housing market, and the sale of an Existing Home does have a significant multiplier effect on the general economy, though not quite that of a New Home.
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10:30 – Oil Inventories (Weekly): Expecting -700K, Last Week -2.5M barrels.  This item broke a three week inventory building streak last week. The pros expect a smaller draw for this week. Possibly having just as much impact on the market price of WTI Crude as the headline print is the Gasoline number.  That one is coming off of a contraction of -2.7M barrels. The only projection I’ve seen for Gasoline stocks for today is for -1.4M. last night’s API data hit the tape in startling fashion last night. Those numbers showed an increase of 4.5M barrels for Crude, and a draw for Gasoline of -2.2M. The markets (Crude, and all sectors reliant upon) will react to this release.
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Wednesday’s Earnings Highlights
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Before the Open: RY (1.70)
After the Close: GES (.07), HPQ (.45), WSM (.58)