Oil Rises Along With Syrian Tensions
Our markets are slightly higher in early trading, bouncing from yesterday's sharp selloff. Tensions in Syria continue to heat up as does speculation about the type of response we will see from the US.
Asian markets were lower overnight. Oil prices spiked as high as $112 overnight, and are trading near $110 currently. India's currency continues to slide and weigh on sentiment in the region. Since June alone, the rupee has lost more than 20% vs. the dollar. Ouch.
Europe's markets are mixed today. German Chancellor Merkel said during a campaign rally that "Greece should have never been allowed into the euro" and that the decision weakened the Stability Pact.
In economic news, pending home sales for July fell -1.3%. After a string on positive housing data we are likely set for some weaker numbers as higher interest rates have cooled things. Wells Fargo said refi activity is down nearly 50% from its recent peak.
The 10-year yield is trading at 2.76% as the Treasury readies to auction $35 billion in 5-year notes today.
And the volatility index hit the 17 level yesterday before settling lower. It is currently down -1% on the day near 16.50.
Trading comment: We have been saying for weeks now that we didn't want to chase the market and wanted to be patient awaiting a better buying opportunity. Yesterday's selling knocked the S&P 500 below its 50-day average and put it in a weakened technical position. Corrections never come in straight lines, so we want to look for opportunities to put cash to work in stages. The SPX is almost 5% off its recent highs. That is probably a good area to start looking to put your first tranche of cash to work. Then we will take another step back and see how the action unfolds.