Jobless Claims Heading In The Right Direction

There were a couple more economic reports released this morning that show the economy is headed toward the path of recovery. The Philly Fed Index showed a much smaller than expected decline for June, coming in at -2.2 vs. expectations of -17.0. This is a small positive sign for manufacturing in that region.

Also, the weekly jobless claims data came in-line at 608,000, but the continuing claims figure fell to 6.69 million vs. expectations that they would total 6.84 million. That is a nice drop, and supports the thesis that the worst of the job losses are behind us.

The early leadership in the market is coming from financials and healthcare, while the laggards are tech and retail.

Asian markets were lower overnight; the dollar is mixed this morning, while most commodities are lower (oil, gold); the 10-year yield is bouncing to 3.76%; and the VIX is -3% lower to 30.53.

Trading comment: The market remains overbought, with added volatility due to tomorrow's options/futures expiration. The S&P 500 tested its 200-day average yesterday, and is successfully bouncing from that level today. The market also remains oversold, so my thesis that we could see a push higher into quarter end is still valid.

Yesterday was mostly a trading day for me, but two positions that I did hold overnight include new long positions in FCX and QSII. Both of those look like they should continue to bounce, but I am using tight stops. POT also looks like a good bounce candidate if it gets down to the 92 area.

long FCX, QSII