Q4 Begins With Another Stall at SPX 1150

The market was again strong out of the gate this morning, but similar to yesterday, the early strength attracted selling and the gains appear to be fading so far.

The economic data was mixed this morning: personal income and personal spending were both slightly ahead of estimates; the Univ. of Michigan Consumer Sentiment survey came in at 68.2, up from last month's 66.6 reading; but the September ISM Manufacturing survey which many people watch slipped to 54.4 from 56.3 in August. This last datapoint seemed to be the one that opened the door to this morning's selloff.

Corporate news has been light, but Accenture (ACN) stock is higher after reporting better-than-expected earnings.

The dollar is lower again, which is boosting commodities. Oil prices have topped the $80 level (currently $81.25), and gold prices are hitting new highs again near $1320.

Asian markets were mixed overnight, with China closed for a holiday. European markets were also higher this morning. The 10-year yield is flat near 2.51%; and the VIX is also flat near 23.60.

Trading comment: As you can see in the chart below, the S&P 500 once again had trouble getting above the 1150 level (pink line). This level is shaping up to be pretty firm resistance, and I think it is becoming likely that the market will back off from these levels and consolidate a bit before ultimately rallying again and breaking above 1150.

I have noticed a change in the last couple of days, and that is that the market has opened very strong, only to selloff and close weak. We still have a long way to go today before the close, but the early pattern is shaping up a lot like yesterday. This is much different action that most of September, when the markets would often open very weak, only to rally and close strong on the day.

I have often said the hallmark of strong markets is the ability to open weak, shake it off and rally into the close. When the opposite occurs, it is a sign that the rally is running out of steam. So I want to be patient, and wait for more of a pullback from here. I have also noted several times that many of the leading growth stocks are extended and in need of pullbacks as well.