Monday Morning Musings

Markets are mixed this morning but mostly just subdued on lower volume.  The stock market has had a fabulous year in 2013, better than almost anyone predicted, and it is likely most participants are sitting on their hands for the next couple of days until the calendar turns to 2014.  As such, volume levels are likely to continue to run at levels similar to last week's holiday shortened week.

In economic news, pending home sales for November rose 0.2%, which was below expectations but above the previous month's decrease of -1.2%.

In corporate news, AAPL is lower by 1% after the Board urged shareholders to reject the buyback proposal recommended by Carl Icahn.

Asian markets were mixed overnight.  S. Korea's industrial production fell -1.3%.  Europe's markets are mostly flat.  ECB President Draghi said no urgent need for additional interest rate cuts as he does not see signs of deflation.

Commodities are lower with oil prices back below $100 and gold prices down near $1205.

Bond yields are lower with the 10-year Note below 3.0% to 2.97% currently. 

The volatility index got down to the 12 level last week, which has been a level that the VIX has bounced from all year.  Today it is up nearly 5% to 13.07 so far.

Trading comment: Markets do appear due for a pause when the calendar changes to 2014.  There is likely some deferred profit taking that will take place.  At the same time, there is often a lot of buying pressure as new funds get committed to the market at the beginning of the year.  Also, we have seen reports that mutual fund managers are holding higher cash balances than they have in many months.  So there are definitely arguments to be made on both sides of the table.  We are not making any big bets on the outcome, but we are holding a little higher levels of cash that we would look to put to work on any pullback.  Patience.

Can Stocks Make It Seven In A Row?

Stocks are basically up six days in a row (one day was flat), which is a pretty long streak.  Stocks moved lower in early trading as I'm sure some profit taking set in.  But many investors are likely hesitant to take too many profits this year with few losses to offset them.  That could make for some delayed profit taking in the early part of the new year.

Volume is running very light in this holiday week, and there isn't much in the way of market moving news either.

One stock getting a lot of attention is Twitter (TWTR), which has been on a huge tear and the stock has gone straight up - a la 1999.  One brokerage firm downgraded the stock this morning and that has caused a reversal with TWTR down -6% so far. 

Asian markets were higher overnight with Japan at multi-year highs.  China was higher also after the Ministry of Commerce reiterated its year-end forecast for retail sales growth of 13.0% and industrial production up 9.8%.  European markets are also near their highs.

The 10-year yield is flirting with the 3.0% level.  This is a key psychological level and could provide some resistance to the upward trend in yields.

Oil prices are also higher and topping the $100 mark today.  We haven't hear much about this in the media, but if prices at the pump continue higher it could become a Q1 headwind for the consumer.  Gold prices are also higher near $1215.

Trading comment: Anyone who sold or shorted the market after the FOMC selloff is kicking themselves given how much the market has rallied since then.  We spoke about underinvested portfolio managers playing catch up into year end, and that likely helped push stocks higher.  But that trade is now long in the tooth, and for those who aren't under the gun of the calendar our bet is there is a better buying opportunity for most stocks after a pullback in the early part of 2014.  Timing is always tricky, but many stocks are extended at these levels and in need of some consolidation.

Monday Morning Musings

The stock market is pushing higher again in early trading, adding to last week's breakout into new high territory.  The Santa Claus rally is usually the period after Christmas into the first few days of the New Year, but it looks like it came early this year.  Par for the course for 2013.

There isn't too much in the way of news, but AAPL is trading 3% higher after finally inking a multi-year deal with China Mobile to sell iPhones on their network in China.

In economic news, the Univ. of Mich consumer sentiment index remained unchanged at 82.5.

The 10-year yield is a bit higher to 2.91%.  Back in October when yields drifted back down to 2.50% we said that we thought yields would trend back towards 3.0% into year-end.  That was a good call.

Asian markets closed higher overnight.  Japan was closed for a holiday.  The PBOC injected more liquidity in China as the cash crunch continues.  The 2-week SHIBOR rate rocketed 124 bps to climb to 8.25%.  That's an astounding spike.  The Chinese govt doesn't want the media harping on the cash crunch.

Europe's markets also finished higher today.  Fitch affirmed France's sovereign rating at AA+.  And Germany's Economics Ministry put out a long-term forecast that projects Germany's GDP growth to be in the range of 1.5% through 2018.

The volatility index is falling another 4.5% to 13.15.

Trading comment: The strength of this rally continues to be surprising.  It feels like a mad last-minute dash by underinvested portfolio managers to increase their equity exposure and add to winners into year-end.  But we would not be surprised to see some weakness in the last week of trading as profits for the year get locked in and exposures get trimmed in preparation for 2014.  The market remains overdue for a correction, which could come in January after the usual new fund flows for the year.  But right now we aren't making any big changes.

Surprised By The Rally

Color me surprised by the strength of yesterday's rally following the announcement that the Fed would begin to taper its asset purchases in January.  I would have guessed that the commencement of tapering would have been met with more selling, as folks digested the beginning of the end of the Fed-injected liquidity that many claim has propelled this bull market.

But after a brief dip the markets quickly found their footing and a strong bid emerged.  I guess that's the way this year has gone, with basically any news being construed as bullish and a reason to buy stocks.  The S&P 500 rallied all the way back to new highs, a strong showing indeed.

This morning we are seeing a bit of profit taking, but nothing serious.  Economic news was a bit mixed.  Leading indicators for November increased 0.8%.  The Philly Fed index rose to 7.0 from 6.5.  But existing home sales for November fell to 4.90 million units from 5.12 million the previous month.

In corporate news, Oracle (ORCL) is higher after beating earnings and revenues.  ACN is also higher after reporting, while Darden (DRI) is lower despite announcing it will spin out Red Lobster.

Asian markets were mixed overnight.  Japan rallied on the continued weakening of the yen (stronger exports) while China was lower amid continued liquidity concerns.  The 2-week SHIBOR rate spiked 114 basis points to 6.21%.

Europe's markets are mostly higher today.  Fitch affirmed the UK's debt rating at AA+ with a stable outlook.  And Eurozone finance ministers are close to a resolution on a mechanism to wind down troubled banks.

Oil prices are higher to $98.25 while gold prices are weak once again and falling below the $1200 level. 

The 10-year yield is higher today to 2.94%. 

And the volatility index has plunged.  It started yesterday on a strong downside reversal.  After touching 16.75 intraday yesterday the VIX closed below 14 and today is lower again down to 13.25.  Yesterday we commented that bulls wanted to see a move back below the 15 level to signal a start to a new rally.

Trading comment: The question after yesterday is, did we already get the Santa Claus rally in one day?  Yesterday's rally came on a big increase in volume and the strength was surprising.  Most people thought the eventual announcement of a taper might cause more concern among investors.  But a $10b taper starting in January isn't a huge amount, and is symbolic in nature in terms of sending the signal that the economy has improved enough to warrant this type of move.  Interest rates on the part of the Fed are likely to remain extremely low well in 2015

Waiting On The Fed

Markets are mixed in early trading, but the first half of today's session is likely to be lackluster ahead of the FOMC announcement.  The Fed's policy announcement will come at 2pm EST with some thinking we will hear the Fed announce their intention to 'taper' their asset purchases.

Our opinion is that there is not enough strong data yet, and with Bernanke on his way out as Chairman we think it is more likely he will wait for Yellen to begin the taper sometime in early 2014.

In corporate news, Jabil Circuit (JBL) has a poor earnings report last night and lowered guidance for next quarter.  Investors are worried that some of that weakness could be related to AAPL, whose stocks is also lower so far today.

On the plus side, Lennar (LEN) reported a solid quarter and that is helping to lift the homebuilding stocks. 

The 10-year yield is also a bit higher to 2.88% on the heels of stronger than expected November building permits and housing starts reports.

Asian markets were mixed overnight.  China's housing prices rose 9.9% year/year.  And Japanese exports increased 18.4%.  As an aside, China is cracking down on bitcoin use and that has caused the virtual currency to plummet overnight.

Europe's markets are mostly higher today.  The Bank of England voted unanimously to keep interest rates and their asset purchase program unchanged.

The volatility index closed above 16 yesterday but today is lower to 15.83. 

Trading comment: The S&P 500 has been stuck in the middle of this trading range above its 50-day average but below its overhead 20-day average.  If today's FOMC statement is met with further selling it will likely mean a test of the 50-day support for the SPX in the 1775 range.  But if folks view the Fed statement as a glass-half-full scenario then we could see buyers emerge and breakout of this recent consolidation.  One thing to remember is that often the initial reaction to the Fed isn't the true trend and its better to see how investors react in the day or two following the Fed.  We are still expecting another push higher into year-end, but it could begin from lower levels than we sit today.

Rising VIX Awaits Santa

Markets are slightly lower in early trading after a nice bounce in yesterday's session.  There wasn't a ton of news today to account for the lackluster start, but overseas markets were subdued as well.

In economic news, the December NAHB Housing Market Index rose to 58 from 55.  But homebuilding stocks are pretty flat on the news.

In corporate news, Boeing (BA) authorized an additional $10 billion buyback and raised its dividend 50%.  That's a lot of money to return to shareholders.  MMM also raised its dividend 35% and reiterated 2014 guidance.  Increased buybacks and dividends continue for large corporations and should be in vogue again in 2014.

Asian markets ended mixed overnight.  Money market rates in China are on the rise once again after the PBOC chose not to provide additional liquidity for the 4th day.  One-month rates climbed 68 basis points to 6.23%.

Europe's markets are lower today.  Eurozone CPI came in at 0.9% year/year.  Germany's ZEW Economic Sentiment rose to 62.0 from 54.6.

The 10-year yield is roughly flat at 2.87%.

Trading comment: One interesting note was that although the market closed near its highs yesterday, the VIX also closed at its highs.  This is a bit unusual and indicates traders didn't necessarily buy in to yesterday's rally.  The VIX closed yesterday slightly above the 16 level and this morning is another 2.6% higher to 16.45 currently.  This is the highest level in 2 months for the volatility index and likely indicates that the market has some more work to do on the downside.  Many folks are looking for the market to rally in this benign seasonal time of year, but its possible that the S&P 500 has a date with its 50-day moving average first.  Right now the 50-day average resides in the SPX 1765 area.  So we are keeping a little powder dry as things look like they might pull back a little more.

Monday Morning Musings

Markets are trading higher in early trading after last week's pullback.  The S&P 500 traded down -1.8% over the last 4 sessions so its not surprising to see this bounce taking shape this morning. 

Markets were also bolstered by some solid economic data.  November industrial production rose 1.1%, above expectations.  Also, Q3 productivity was revised higher to 3.0% from 2.7% and unit labor costs were revised lower to -1.4% from -0.6%.  The Empire Manuf. Survey also increased last month.  Those are all positive datapoints. 

Interestingly the positive economic data isn't pushing bond yields higher today.  So far the 10-year yield is flat near 2.85%.

Asian markets were lower overnight.  China's HSBC Manuf. PMI slipped to 50.5 from 50.8.  Japan's Tankan index improved.

Europe's markets are higher this morning.  Eurozone manuf PMI improved to 52.7 from 51.6 while the services PMI slipped to 51.0 from 51.2.

Commodities are also higher with oil prices up a bit to $97.30 and gold prices firmer near $1241.

The volatility index got above the 15 level during last week's pullback in the stock market, and today is still hovering in the 15.60 range.  Our guess is that those folks looking for the fabled 'Santa Claus' rally might look to a move by the VIX back below the 15 level as the green light for the next rally.

Trading comment: Stocks have consolidated nicely and the market has worked off its recent overbought condition.  That doesn't mean you have to jump in and do all your buying on Day 1 (today), but we do think that stocks could enjoy another push higher into year end.  There has also been a lot of tax loss selling in losing areas like REITs and preferreds, and pretty soon those could be good candidates to add to as they should enjoy nice January effect bounces when the tax-related selling subsides.

Investors Yawn At Proposed Deal In Washington

Markets are lower in early trading, despite news that lawmakers have reached a deal in Washington that would avoid another govt shutdown taking place in January.

The deal is for a 2-year budget agreement that would reduced the sequester cuts by $63 billion and lower the deficit by roughly $20 billion.  The deal has yet to be approved by Congress, and maybe that is why Wall St is skeptical.  It's one thing to cobble together a deal, but another to get this dysfunctional Congress to approve anything ahead of a looming deadline.

In corporate news, Costco (COST) is trading lower after missing earnings estimates.  Retailers are mixed following the news.  Separately, MasterCard (MA) is 4% higher after announcing a 10-for-1 stock split, increasing its quarterly dividend by 83%, and announcing a new $3.5 billion share repurchase program.  A 10-1 stock split is big.  I wonder if it will spur any other high priced stocks (GOOG, PCLN, AAPL) to consider a split.

Asian markets ended lower last night.  The pollution in China has gotten really bad and the govt is making some noise about tighter controls over coal consumption. 

Europe's markets are mildly higher.  Germany's CPI ticked up 0.2% putting the yearly rate at 1.3%.  Not much inflation.

The 10-year yield is up slightly to 2.82%.  And the volatility index is spiking another 6% taking the VIX up to 14.77, still shy of the 15 level we have spoken about.

Commodities are mostly lower, with oil prices just below $98 and gold prices down a bit near $1257.

Trading comment: For folks who have been looking for the fabled Santa Claus rally, a pullback in the market here would be just what the doctor ordered.  If we could have an orderly decline for a little bit here, and work off some of the overbought scenarios in many stocks that could set the market up nicely for another end of year push higher later this month.  The SPX is just below its 20-day moving average, where it has found support recently.  So we will need to watch these levels for the next couple days to see if the market finds support again or if a trip to lower levels is in the cards.  Next support levels probably come into play at SPX 1775.

Volcker Rule Passes

The markets are lower this morning in early trading.  But the stair-step higher pattern we have seen most of the year is still well intact.  The controversial Volcker Rule looks to have passed, meaning banks won't be able to engage in propriety trading and can only hedge reasonable exposures.  It will be interesting to see how this is implemented.  But so far the financials are actually trading higher after CFTC commish Bart Chilton said it is unlikely to be implemented before 2015.

The dollar index has been declining the last couple of weeks, which is likely boosting commodities.  Gold prices haven't benefited as much, but are higher today near $1262.  Oil prices have moved up more recently and are now above the $98 level.

Asian markets ended mostly lower.  China's industrial production increased 10.0% and retail sales grew 13.7%, both in-line with estimates.  Japan's household confidence index rose to 42.5 from 41.2.  But Prime Minister Abe's popularity has suffered a 10.3 percentage point drop in the polls.

Europe's markets are most lower also, after weak industrial production numbers out of France and Italy.  Great Britain's data was strong again and it appears their economy is firming.  The FT reported that France and Germany are close to an agreement on the structure of the much debated European banking union.

The 10-year yield is lower today to 2.81%.  And the VIX is 5% higher so far to the 14.15 level.

Trading comment: In addition to the concerns about the Volcker Rule and its effect on the financial industry, there is also some chatter today that the Fed could begin their 'taper' this month.  We think that's still unlikely, as Bernanke is almost done with his term and waiting another month until Yellen takes over likely wouldn't make much of a difference.  But if the Fed were to start its taper this month, it would likely rattle the markets a bit and stocks would likely selloff short-term while bond yields could rise.

Monday Morning Musings

Markets are higher in early trading despite some lackluster action overseas.  There has been no economic data to report today, and little corporate news.  Sysco (SYY) is up over 15% at the start after agreeing to acquire US Foods for $8.2 billion.

The Nasdaq is hitting new highs while the S&P 500 is close, about 4 points away as of now.

Bond yields are easing back a bit with the 10-year yield trading at 2.84%.  Interest-rate sensitive stocks are lagging again, with utilities down the most of any sector today, and REITs and MLPs lagging.

Oil prices are steady near $97.57 while natural gas prices are hitting a 6-month high amid surging demand from all the cold and snow storms along the east.  It's been pretty cold out west too.  I had my heat on all weekend.  Gold prices are up a little to $1236.

Asian markets were mostly higher overnight.  China's trade surplus widened after exports grew more than expected (+12.7%).  Japan was higher also despite its final read of Q3 GDP being revised lower to 0.3%.

Europe's markets are mixed after Germany's industrial production fell 1.2% last month, below expectations.  Also, Eurozone investor confidence ticked lower to 8.0 from 9.3.

The volatility index is a little higher today hovering around the 14 level.  Last week it topped the 15 level, something we forecast after its most recent trip down to the 12 floor. We think that 12-15 trading range is likely to remain in place into year-end, but after that we are probably overdue for a spike above the 15 level on the next correction in the market.

Trading comment: The recent pullback in the market was once again more of a wiggle than anything else.  The finish line for the year is firmly in sight for most portfolio managers, so window dressing is likely setting in where investors are selling their losing positions and adding to their winners.  I think we have been seeing a lot of tax loss selling also, where the weakest stocks and sectors have continued to be sold despite looking like they are good values at current levels.  We have seen selling in REITs and preferreds in particular, which should make for a very good 'January effect' bounce next year after the selling has run its course.

No Taper Fears Today?

Color me a bit surprised by the reaction in the stock market to today's jobs report.  What we have seen recently, and even yesterday, is that whenever we get strong economic data stocks sell off due to fears that the Fed will be pressured to taper sooner rather than later and that will hurt stocks.

So today when the November nonfarm payrolls report came out better than expected (203,000 jobs vs. expectations for 180k) I would have expected stocks to sell off at the open of trading.  Moreover, the unemployment rate actually fell from 7.2% to 7.0%.  More taper pressure, right?

And then we got the Univ of Mich. Consumer Sentiment survey which showed a big spike up to 82.5 from 75.1 in November.  Surely that should cause a selloff in the bond market, rising bond yields, and pressure on stocks.

But an hour into trading the Dow is up more than 150 points and the 10-year yield is flat from yesterday's closing levels near 2.87%.  What gives?

I think the best explanation is that investors are viewing today's jobs report as sort of a Goldilocks scenario.  That is, the number of jobs added is enough to continue this modest economic recovery we have been mired in but not necessarily so strong that it would prompt the Fed to question their extreme accommodative monetary policy.

After all, some job growth is good and needed.  It should help support wages, which boost consumer confidence and spending, which should lead to a renewed capex cycle and help boost corporate profits - all of which should continue to support stock prices.  So that seems to be the temperature of investors today, at least in our view.

Is The Economy That Strong?

Markets are lower again in early trading amid more fears that the Fed will begin to taper sooner due to stronger economic data coming in.

The ADP payrolls report was stronger than expected yesterday, and today the GDP report was revised higher than most people expected.

The second estimate of GDP for Q3 indicated the economy grew 3.6%, which is much higher than the initial estimate of 2.8% and up significantly from Q2's gain of 2.5%.  But there are comments that much of the gain came from a change in private inventories.  To wit, retail final sales, which excludes inventory adjustments, rose just 1.9%.  So is the economy really as strong as today's GDP report would indicate?

For now, investors are selling first and asking questions later.  This will make tomorrow's monthly jobs report all the more important.  If the jobs report is strong, taper fears will spike again and stocks will likely selloff.

In corporate news, AAPL stock is up on a down day after reports indicate the company is close to inking a deal with China Mobile to distribute iPhones over their network.  AAPL hit $575 in early trading.

Asian markets ended mostly lower.  S. Korea's GDP rose 3.3%. 

Europe's markets are mixed after both the Bank of England and ECB held rates steady.

Taper fears are also hurting precious metals, with gold prices falling down to $1219.

The 10-year yield is higher to 2.85%.  If you look at the chart of the 10-yr yield like it was a stock, you would be bullish and looking for higher prices (yields).

Trading comment: The stock market is down for a rare 5th consecutive day, although the declines have been very mild on a percentage basis.  Underinvested portfolio managers appear to still be in dip buying mode.  That could play out tomorrow as well.  We would not be surprised to see stocks open lower on a stronger than expected jobs report, but rebound by the end of the day as investors look to use the weakness to add equity exposure.  We are sticking with the names we mentioned recently that are nearing fresh breakouts, and also warming up to some of the energy plays that have been weak in recent weeks.

Do Investors Really Prefer A Slower Economy?

Interesting action in the market in the first hour of trading.  The first economic report we got today was the ADP Employment Report, which was stronger than expected.  That caused a selloff in stocks and the S&P 500 fell nearly 10 points to touch the 1785 level.

But a half hour later the ISM Services report came out showing a slowdown from 55.4 to 53.9 in November.  There was also a slowdown in the new home sales figures that were released.  And with that slower data the stock market rallied back into positive territory.

Confused? It all comes down to the 'taper' expectations.  When the strong data came out investors reacted by selling stocks as they anticipated that the Fed would be more likely to taper sooner than later.  But when the weak data came out investors questioned that initial reaction and felt better that maybe the taper wouldn't come too soon, so stocks rallied.

Bond yields seem to be more concerned with the employment data, as the yield on the 10-year Note has spiked to 2.84% and not pulled back much.

We think that this type of back and forth logic is a bit silly.  It is true that the stock market has been fueled by the monetary accommodation of the Fed.  But the market should still fare well as the economy continues to improve.  A Fed tapering is different that a true tightening of monetary policy.  We are still years away from the Fed actually raising the fed funds rate, and even farther away from the fed funds rate getting to a level that risk-free assets start to look attractive from an investment point of view again.

Oil prices are higher again to $96.50, reversing the recent weak trend we had been seeing.  Gold prices are bouncing a bit to $1226, but still appear mired in a downtrend.

Trading comment: It looks right now like we could be seeing the same patter emerging in the stock market.  That is, the SPX has pulled back for 3 consecutive days and appears poised to bounce.  It also found support right at its 20-day average, which has held since early October.  On a percentage basis its hard to call the recent action a pullback.  It's more like a wiggle.  We have added a couple stocks to our trading accounts that are breaking out and look attractive - STX and NXPI.  Some of the lagging energy stocks continue to build bases (EOG, PXD, NBL, etc).

KAM Advisors has long positions in EOG, NXPI, STX

Was That Another Pullback?

Markets are lower in early trading, but just by a hair.  Yesterday markets were higher most of the day but faded late in the day to close near their lows.

It sure doesn't feel like it, but if the market closes down today it would be day 3 of this recent pullback since the S&P 500 made a closing high at 1808.  The SPX is currently hovering around the 1800 level, so this pullback certainly hasn't been much to speak of.  But if recent history repeats itself, the pattern has been for 3 days of weakness followed by more rallies.  Stay tuned.

There was no major economic data out today.  Friday is another important jobs report as it relates to the Fed's intention to 'taper', and folks are already talking about Friday's report affecting trading all week.

In company news, Rio Tinto (RIO) announced plans to cut next year's capital expenditure budget in half, reflecting the difficult environment as it relates to commodities and global growth.

Also, AAPL is trading nearly 2% higher after reports suggest that China Mobile has begun accepting pre-orders for iPhones.  AAPL stock is only up 5% this year, in a year when the market is up over 25%.  So it has been a big laggard.  We recently highlighted its breakout from the 525 level, and would not be surprised to see the strength carry the stock to $600 by year-end.

Asian markets were mixed overnight.  China's services PMI slipped to 56.0 from 56.3.  And the Reserve Bank of Australia left its key rate unchanged at 2.50%.

Europe's markets are mostly lower.  Eurozone PPI fell 0.5% last month while the year/year reading fell -1.4%.  Great Britain's construction PMI jumped to 62.6 from 59.4.

Bond prices are higher currently pushing the 10-year yield lower to 2.77%.

The volatility index is higher and touched 14.77 earlier this am.

Crude prices are spiking higher to $95.75 and we are hearing some chatter about Iran.  Gold prices are bouncing slightly from oversold levels, but still only near $1223.

Trading comment: The stairstep market continues.  And surprisingly, the SPX has held support along its short-term 20-day moving average since October 11.  That's a pretty long and rare streak to trade above the 20-day line.  While December is often a bullish seasonal month for stocks, the longer we trade in this fashion the more likely it is that we experience a sharper correction down the road.  It's been awhile since we have had a 10% correction, so folks will likely freak out when it occurs and ask if the bull market is over.  But our guess is it will probably be a good buying opportunity, if and when.  But that is not today's order of business.  Just putting it out there.

KAM Advisors has long positions in AAPL

Monday Morning Musings

Markets are off to a lackluster start after the Thanksgiving holiday weekend.  Reports about retail sales are mixed, but boy it sure was a great weekend for college football.  Retail stocks are mostly lower after the National Retail Federation said that retail sales are below last year's levels.  But comScore has said that online holiday sales to date are up 3.0% vs. last year.

In economic news, the November ISM manuf. index rose to 57.3 from 56.4.  There was also a report showing October construction spending rose 0.8%.

Asian markets were mixed overnight.  Tensions continue to heat up between Japan and China regarding the no fly zone.  Reports suggest the US will join Japan in asking China to stand down.  China's HSBC manuf PMI rose to 50.8 from 50.4.  India's PMI also improved while Australia's fell below the 50 level to 47.7.

Europe's markets are mostly lower.  The Eurozone manuf PMI held at 51.6 from 51.5.  Great Britain's rose the most to 58.4, while Spain's fell to 48.6 from 50.9%.

Bond yields are on the rise today, with the 10-year yield up to 2.80%.  If the 10-yr closed here it would be the highest closing yield since September.

Volatility is also on the rise with the VIX index up 2.5% to 14.05.  The VIX had been hovering in the 12 range but has started to breakout and should get back to 15.

Oil prices are higher near $93.60 but most other commodities are lower.  Gold prices are weak again falling to $1228.  Silver and copper prices are also lower today.

Trading comment: The market still looks like it is in need of a pullback, but hoping for said event has been an elusive endeavor.  We continue to look for stocks that are just breaking out and could lead into year-end.  Last week we highlighted AAPL which has had a nice move already and still looks good.  Today we are adding STX which appears ready to break to new highs imminently.  Financials continue to show solid action while REITs and utilities continue to lag.

KAM Advisors has long positions in AAPL and STX