Wednesday, November 27, 2013

Pre-Turkey Day Rally

Markets are higher again in early trading.  Economic data this morning was mixed, as was overnight trading in foreign markets.

In economic news, the Univ. of Mich Consumer Sentiment index for November rose to 75.1 from 72.0.  This is a divergence from the other consumer confidence reports out earlier this week.

October durable goods declined 2.0%, or -0.1% excluding transportation orders.  And the November Chicago PMI reading fell to 63 from 65.9, but this was still above expectations.

Asian markets were mixed overnight.  Tensions seem to be on the rise in Japan and China regarding the no-fly zone.  Yesterday a Japanese commercial jet flew over the zone and the day before 2 US B-52s flew over it.  Separately, the Thai central bank cuts its key rate 25 bps to 2.25% and lowered its growth outlook for both 2013 and 2014. 

Europe's markets sport modest gains.  Great Britain's GDP rose 1.5% year/year and Spain's retail sales slowed to 0.5%, below expectations.

Oil prices are weak again, falling to $92.35 today.  Gold prices are flat around $1242.

The 10-year yield is on the rise today, up to 2.74%.  REITs are trying to bounce after a showing significant weakness recently.

Trading comment: Yesterday we highlighted AAPL as a good candidate to rally into year end.  Volume picked up on yesterday's advance and today the stock is breaking out of the recent consolidation range we highlighted.  Volume looks solid again, especially for a pre-holiday trading session when volume will likely be light.  This breakout in AAPL should attract more late-to-the-party buyers and reinforce the positive price action.  We have sold our remaining shares of EMC due to ongoing lagging performance and concerns that the negative price action could be exacerbated into year-end.

KAM Advisors has long positions in AAPL

Tuesday, November 26, 2013

Housing Market Still Hot

The market is slightly higher again in early trading.  Yesterday's session was fairly lackluster, and today's is starting out similar, but the market still refuses to go down in any meaningful way.  The week of Thanksgiving is typically a strong seasonal period for the market, but with stocks already up so much coming into this week it seems unlikely that stocks would stage another big rally from here.

More typical of the way this year has gone is for the market to go into a period of sideways consolidation before taking another stair-step higher. 

The housing market is a bright spot today after the Case-Shiller Home Price Index rose another 13.3% in September following a 12.8% increase the previous month.  This data lags a bit, so it will be interesting to see how October and November have fared.

Separately in economics today, the consumer confidence reading for November slid to 70.4 from 72.4 last month.  Today's reading was below expectations.

Markets in Asia were mixed overnight.  A PBOC official commented that domestic inflation in China is stable and that they should have no trouble growing at 8% in the coming years.

Europe's markets are mixed today.  An ECB member said that interest rates will remain low for an extended period as the recovery remains weak and fragile.

The 10-year yield is easing back further to 2.70% today.  Last week it topped at 2.83%, but the intermediate-term trend remains higher.

Gold prices are slightly higher near $1245 and oil prices are also up today to $94.25.  On CNBC, Dennis Gartman predicted crude prices will continue to slide along with lower prices at the pump.  Let's hope he's right.

Trading comment: Most stocks still look extended on their charts after the recent rallies we have seen.  One stock that has been consolidating for the last month is AAPL.  It has mostly traded sideways since reporting earnings and now actually looks like it is poised to breakout and head higher.  AAPL's higher after reporting earnings was $539.  Today it is at $529, so not too far away.  We have been adding to our AAPL positions a little bit here and there, but this one could be a nice play into year end as folks look for catch up stocks that haven't run too much recently.  I also expect that AAPL should have a strong holiday season now that its product lineup is refreshed.  I know that I am in the market for a new iPad since mine is a few years old and one of my kids is ready for an iPad mini too.

KAM Advisors has long positions in AAPL

Monday, November 25, 2013

Monday Morning Musings

Markets are slightly higher in early trading.  Last week the stock market saw a 3-day pullback in the first part of the week, but the subsequent bounce took the S&P 500 right back to new highs.  Pretty surprising, but shows that dip buyers remain eager to put money to work in stocks.

Over the weekend a nuclear deal was reached with Iran.  Oil prices are only down slightly as a result, near $93.86 this morning.  But it helped improve sentiment and most Asian markets rallied overnight.  China lagged as tensions heat up with Japan over the Senkaku Islands.

European markets are also higher today.  Germany's finance ministers said that contagion risks are no longer present in the Eurozone.

In economic news, pending home sales for October ticked lower to -0.6%, following last month's revised decrease of 4.6%.

Gold prices are also lower this morning, near $1240 but silver prices are higher.

The volatility index remains at very low levels near 12.67, which has probably helped the equity markets rally as we remain in this subdued period of volatility. 

Trading will be light this week as the market is closed for Thanksgiving on Thursday and open for just a half day of trading on Friday.

Trading comment: For most of the year we have been talking about the stair-step market, and lately it has simply been more of the same.  Last week's dip was bought quickly and the market is back at new highs.  There also continues to be healthy group rotation, such that while areas like oil & gas are correcting right now money is flowing back into financials where we are seeing fresh breakouts in the banks and brokers.  Biotechs are also back in rally mode after a few weeks of pullbacks and consolidation.

Thursday, November 21, 2013

Keeping The Bears Off Balance

Markets are bouncing back this morning.  This has been a pattern we have seen quite a few times.  The market pulls back for 3 days or so, and then has a big bounceback.  It used to be that better rallies came from the market opening lower in the morning and rallying late in the day.  So I am always skeptical of this early day strength.  But this year has been different, and many of these early rallies have been able to maintain their gains into the close.  We shall see.

Retail stocks are lagging after names like Target (TGT) and Dollar Tree (DLTR) are lower after reporting disappoint results.

In economic news, the Philly Fed Survey for November fell to 6.5 from 19.8, a fairly large plunge.  Producer prices declined 0.2% last month and are up a tame 1.4% over the last 12 months.

Asian markets ended mixed.  China's HSBC manuf. PMI slipped to 50.4 from 50.9.  So far China has done a pretty good job about engineering a soft landing buts its speculative property bubble is still highly inflated and looms as a longer-term problem.  Singapore's GDP rose 5.8%.

Europe's markets are mixed.  Eurozone manuf. PMI ticked up to 51.5 from 51.3.  Services PMI slipped to 50.9 from 51.6.  Germany's PMIs were solid while France was weak, with both PMI readings coming in below the 50 level that marks expansion vs. contraction.

Germany's finance minister said the ECB cannot solve the Eurozone's debt issues, referencing comments yesterday that the ECB could implement negative deposit rates as another tool.

The yield on the 10-year note spiked higher yesterday after the FOMC comments about tapering.  It rose about 10 basis points and now sits near the 2.80% level.  While many folks thought the 10-year would linger in the 2.50% area into year-end, we raised the concern that a climb back towards 3.00% was a distinct possibility and added to our interest rate hedges via ETFs.

The volatility index is down -5% and back to low levels around 12.70.

Trading comment: A bounce today should not come as a surprise.  After three down days it is normal to see dip buyers come in and boost the market.  But we see more consolidation in the near-future and want to be patient here.  That strategy will likely yield a better buying opportunity.  Most stocks we look at still appear extended from recent rallies.  A few financials look good here as well as some services stocks.  REITs continue to lag which has to be due to interest rate concerns.

Wednesday, November 20, 2013

Bending But Not Breaking

Stocks have opened on a slightly positive note this morning.  Yesterday the selloff started to pick up some steam mid-day but never really gained any traction.  Overall the selloff was fairly mild and volume was mixed.  So we didn't see heavy distribution and we didn't see the type of sharp selloff that we used to see when the market got frothy and overbought.

There has also been group rotations going on with hot groups undergoing corrections and funds flowing into other sectors.  The shale gas plays have had large corrections, many biotechs have pulled back, and the last few days have seen sharp pullbacks in the 3D printing stocks.  So there certainly is profit taking going on in areas that become overheated.

In economic news, October existing home sales were 5.12 million units, which is down from the prior month's pace of 5.29 million.  Also, October retail sales rose better than expected by 0.4%, showing that the govt shutdown didn't have as big an impact as some feared.

The economic reports had bond yields moving higher initially, but bond yields have eased back since with the 10-year yield falling back to 2.69% so far.

Asian markets were mixed overnight.  Japan's trade deficit widened as exports rose 18.6% but imports surged 26.1%.  Major European indexes hover near their lows.

Oil prices are steady near $93.43 and gold prices are weaker today to $1262.

The volatility index remains at low levels around 13.25.

Trading comment: The market continues its recent pattern of bending but not breaking.  The last 2 days could have seen much deeper selloffs and no one would have been overly shocked.  But instead we see this continued mild pullback on reasonable volume, indicating more of another consolidation phase rather than the typical correction most investors are accustomed to.  The downside of this type of action is that it breeds more complacency and at some point when investors have been conditioned to buy each and every tiny wiggle without losing money the market will surprise them with a much sharper correction that will test the conviction of all of the newly minted bears.  It's hard to envision this scenario playing out before year-end, although its possible.  But more likely this is an early 2014 event that folks should be thinking about.

Tuesday, November 19, 2013

A Pause In The Action

Markets opened in fairly lackluster action again today.  Yesterday the markets moved higher in early trading but reversed lower into the close.  Those types of negative reversals often indicate that the market is in need of a bit of rest at the least and sometimes they market the beginnings of a new pullback.  We shall see.

In economic news, the employment cost index came in at 0.4%, which was slightly below expectations.  There are no other major economic reports today.

A few earnings reports have also trickled in.  Home Depot (HD) is a standout on the upside as its stock is higher after reporting.  BBY and CPB are seeing their stocks move lower after reporting.

Asian markets were mostly lower overnight.  The PBOC in China said that it will widen its currency band and basically end its intervention in the currency market and establish a managed float.

Europe's markets are also lower.  The Eurozone ZEW Economic Sentiment index ticked up from 59.1 to 60.2.  Germany's economic index also improved to 54.6 from 52.8.  Norway's GDP expanded 0.7%.  And the EFSF approved an aid disbursement to Portugal for 3.70 billion euros, as expected.

The 10-year yield is up a touch today, and still hovering just above its 50-day average at 2.69%.

The volatility index remains low despite yesterday's market reversal, sitting at the 13 level.  So traders aren't looking for heightened volatility in the near-term.

Commodities are slightly higher today.  Oil prices are up a bit to $93.22 and gold prices are also slightly higher near $1275. Silver and copper prices are up also.

Trading comment: As we have said, it hasn't paid this year to raise a bunch of cash and get too defensive ahead of an expected market decline.  Pullbacks have been brief and shallow affairs and the better course of action has been to either just ride it out or trim some of your winners that have recently run and add it back to those stocks that are nearing new breakouts.  Right now many of the shale gas plays are undergoing corrections after huge rallies this year.  This could be an interesting group to watch, but we want to be patient until these stocks for new bases and start to reverse their current downtrends.

Monday, November 18, 2013

Monday Morning Musings

Stocks opened on a higher note this morning with the S&P 500 eclipsing the 1800 level to set a new record.  The strength likely washed up from overseas as their markets were higher overnight.  Since the open, the SPX has drifted back below the 1800 area.  But it's still early. 

In economic news, the November NAHB Housing Market Index slipped to 54 from 55 last month.  That marks a 4-month low for this series as homebuilders cite rising construction costs.

Asian markets were higher overnight led by China and Hong Kong, after the reforms announced by China last week.  China's house prices also rose 9.6% last month.  Moody's said that the direction of the current Chinese reform is a positive for the country's sovereign rating.

Europe's markets are also higher.  Germany's House Price Index rose 0.8%.  And Italy's PM said that he expects the country to return to growth next year and post GDP growth of 1.4%.

Commodities are weaker with gold pries lower to $1280 and oil prices slightly lower around $93.75.

The 10-year yield is easing back further to 2.67%. 

The volatility index is nearly 5% higher today to 12.75, still a very low level after it touched the 12 level on Friday.

Trading comment: For the last couple weeks we have been saying that due to the mostly sideways consolidation in the major indexes that it was becoming more likely that instead of a deeper pullback we could see another breakout.  That is exactly what took place last week as the S&P 500 topped the 1275 level that had been acting as resistance and quickly climbed to the 1800 level where we sit today.  We looked for some opportunities last week to put more money to work and continue to operate under that strategy.  Pullbacks continue to be shallow sideways affairs as more participants put money to work in equities and reallocate away from fixed income.

Wednesday, November 13, 2013

Will ECB Be Next Cental Bank To Enact Quantitative Easing?

Markets are trading in lackluster action again in early trading, but once again any pullback has been mild and contained.  Certainly not the vicious pullback the bears were looking for.  I also feel that the longer we move sideways the closer the market is to another upside breakout.

There were no big economic reports to speak of.  Bond yields are creeping lower as the 10-year fades back to 2.73%.  The Treasury will auction off $24 billion in 10-year Notes today.  And tomorrow will be Janet Yellen's confirmation hearings in Washington.  So we should hear a lot about QE, tapering, inflation expectations, etc.

Speaking of QE, the chief economics at the ECB said that the central bank could deploy and asset purchase program (QE) in order to meet its inflation target of 2.0%.  They are probably looking at the success of the Bank of England's program, as the BoE today released an upbeat report saying their recovery has finally taken hold.  The Bank of Japan also recently said it expects its asset purchase program to help meet it's inflation target.

The ECB would be the 4th central bank to engage in quantitative easing to help avoid further deflation.  That seems to be the worry of the day for central banks.  They are less worried about inflation, as they feel that have the tools necessary to combat that evil.  But you have to wonder how long it will be before we could be talking about too high inflation and people pointing the finger at these QE policies. 

Considering all the QE going on and talk about reflating economies and assets, you sure don't get that sense from looking at the chart of copper.  Take a look at the copper ETF (JJC) and you'll see an economically sensitive metal that is breaking down again and mired in a bear market.  Odd.

The VIX is 2.5% higher to 13.15, but overall complacency reigns in most of the sentiment indicators that we follow.

Trading comment: Sticking to the playbook and looking for spots to add to stocks that have consolidate and pulled back from recent highs.  We trimmed some of our 3D printing names as they have gone straight up - not a bad problem to have.  While we were hoping for more of a pullback, we don't want to be left holding too much cash if and when the markets break out again.  Year-end performance pressures are likely beginning to surface and fund managers will be adding to their winners into year-end in window-dressing fashion.

Tuesday, November 12, 2013

Consolidating Near Recent Highs

Markets are pulling back this morning, but again not in a big way.  Recent selloffs have mostly been mild and a look at the major indexes shows that they continue to consolidate near recent highs.

There are no major economic reports today, and earnings season is winding down. 

Action overseas was nothing to write home about either.  Asian markets were mixed, but Japan rallied strongly as the Yen dipped to a 2-month low.  The Bank of Indonesia surprised markets by hiking its key rate 25 bps to 7.50% to combat inflation.  The Chinese press said that China could lower its 2014 GDP growth target from 7.5% to 7.0%.

Europe's markets are mostly lower today.  The European Union has agreed to a budget for next year that calls for spending cuts of 6%.  Another headwind to economic growth.

Commodities are lower today.  Oil is slightly weaker near $94.90.  Gold prices are lower to $1280.

The 10-year yield is up slightly to 2.77%.  And the VIX is a bit higher today but still at low absolute levels around 12.75.

Trading comment: Not a lot of market moving news today.  The market continues to pullback in mild fashion and not give much back in percentage terms.  The normal pattern here is that after a period of this sideways consolidation we would see another breakout to new highs.  I would say our biggest worry here is that investors are growing more complacent.  It seems consensus now that stocks will stay strong into year-end and enjoy another solid year in 2014.  If we know anything, it's that the consensus is rarely correct in its forecast.  So we could see something that shakes investor confidence. The question is more of when not if something like that happens.

Monday, November 11, 2013

Monday Morning Musings

Markets are off to a lackluster start this Monday morning as we celebrate Veteran's Day in the US.  The bond market is closed today in observance.  There were also no economic reports this morning.

Shares of AAPL are a bit weak this morning as there is some chatter that the company is putting its plans for a TV on hold.  Not sure what to make of this rumor, since AAPL never confirmed its plans for a TV to begin with, even though there has been much speculation.

Asian markets ended on a mixed note overnight.  China released some economic data which showed CPI rose 3.2% year/year, industrial production rose 10.3% and retail sales rose 13.3%.  All of those were basically in-line with forecasts, and nothing really stood out on the upside or downside.

Europe's markets are modestly higher today.  Standard and Poor's lowered their rating on the European Financial Stability Facility from AA+ to AA, due to their downgrade of France last week.

Commodities are mixed today, with gold lower to $1281 and oil prices higher near $95.15.  Oil could be higher due to talks breaking down in Geneva regarding Iran shutting down their nuclear program.

The volatility index remains low trading at 12.75 today.  With the exception of a brief trip to lower levels in March, this level on the VIX has basically been a floor so it wouldn't be surprising to see a bounce from here.

Trading comment: Growth stocks began to pullback last week and shows signs of the beginning of a correction phase.  But true to form, the major indexes bent a little but didn't break as they rallied strong on Friday.  That continues the pattern of mild pullbacks that resolve themselves mostly by sideways consolidation as opposed to deep pullbacks.  The end of the year is surely starting to creep up on portfolio managers where performance anxiety begins to play a role and without a deeper pullback in stocks some may be forced to pay up and chase stocks higher as they try to play catch up into year-end.

Thursday, November 07, 2013

Twitter Flies On A Weak Day For Stocks

Markets are down across the board this morning as growth stocks seem to be the brunt of some profit taking.  We have talked about the market consolidating from its recent highs, so a couple of down days should not be surprising.  Tomorrow is the big monthly jobs report.  Rumors are that we could see a weak employment number, so that could be on the minds of investors today as well.

The big news today was the IPO of Twitter (TWTR).  The stock opened 75% higher than its IPO price and has been trading between $45-50 after being priced at $26 yesterday.  So far the IPO looks to have gone much smoother than the Facebook (FB) IPO.

The other big news was a better than expected GDP report, with Q3 GDP rising 2.8%.  Normally this type of pickup in growth would be cheered by the market, but today some people might be concerned that this type of strong growth could put the 'taper' talk at the Fed back on the front burner.

While TWTR will steal the headlines, probably a more important event for global markets was the decision by the ECB to cut its key rate in half to 0.25%.  This was a big move for the ECB and really speaks to the sluggishness of their recovery and their continuing concerns with battling deflation.  The Bank of England made no changes to its monetary stance.

The ECB rate cut caused a drop in the euro and a spike in the US dollar.  That also weighed on commodities, with oil prices lower near $93.90 and gold prices down to $1310.

European markets are higher on the ECB news.  Also, Spain's industrial production surprised to the upside by rising 1.4% versus expectations for declines. 

Asian markets ended mostly lower last night.  China's big four banks reported October new loans of CNY182 billion, which is the lowest total of this year. 

Trading comment: We want to give stocks a little more room here to consolidate.  Growth stocks are succumbing to profit taking with many testing or breaking below their 50-day moving averages.  So while we plan on using upcoming weakness to add to stock positions we probably will not look to start putting any money to work today.  Just trying to be patient and pick our spots.

Wednesday, November 06, 2013

Waiting On Friday's Jobs Report

The market spiked higher after the open this morning, but the gains have faded with the Nasdaq moving into the red and the S&P giving back much of its early gains.

The stock market continues to consolidate in a sideways fashion as we have noted several times in the last couple weeks.  The October jobs report had been delayed due to the govt shutdown, and will be released this Friday instead.  Whispers are that the number could be quite a bit weaker than recent reports.  It's possible that this is keeping investors playing things close to the vest until they get this important read on the labor market, which also influences the Fed.

Leading indicators rose 0.7% in September, following an equal rise in August.

The big earnings report folks are watching today is Tesla (TSLA), which is down -15% after beating estimates but showing fewer deliveries than the Street was looking for.

Tomorrow will see the IPO of Twitter which should provide a lot of excitement.  Hopefully the IPO will go off better than the Facebook (FB) debacle and will also prove to be priced better.

Asian markets ended mixed.  Overnight SHIBOR rates in China eased further, with the one-week rate falling to 3.87%.  Indonesian GDP rose 5.6% yr/yr (in-line with forecasts).

European markets are hovering in positive territory.  Eurozone retail sales declined -0.6%, worse than expected.  German factory orders rose 3.3%.  French and Italian services PMIs remained above 50 while Spain is still below the key expansion/contraction line at 49.6.

Oil prices are higher today near $94.50 and gold prices are also up a bit to $1315.

The 10-year yield is easing back to 2.65% after hitting 2.67% yesterday.  And the volatility index continues to hover in low territory just above the 13 level at 13.32.

Trading comment: Yesterday we added a couple names to our growth portfolios as many of these stocks continue to hold up well.  3D printing stocks have remained incredibly strong with DDD going almost parabolic yesterday.  We trimmed those positions a little while added a small position in a new name.  Biotech stocks have also been very strong, but look to be in a phase where we will see them take a breather and consolidate their recent rallies. 

KAM Advisors has long positions in DDD, FB

Tuesday, November 05, 2013

Rates Starting To Bounce Again

Markets are lower in early trading, but not by a large percentage.  Given that the market remains overbought these bouts of early weakness are not surprising.  But the market seems to bounce each day and rarely closes on its lows lately.

In economic news, the October ISM Services Index rose to 55.4 from 54.4 last week.  Not sure if this is the culprit for rising rates today, but the selling in Treasuries has pushed the 10-year yield up to 2.67% today.  That's a pretty nice bounce from the 2.50% level we saw hold recently. 

Lots of folks think with the Fed taper off the table for now that rates should remain low in this 2.50% range, but rates are hard to predict and if the market starts to sniff out stronger GDP growth in 2014 then we could see investors talking about that 3.0% level again as we get into year-end.  Not many people are looking for this, but it's something to put on the radar.

Asian markets ended mixed.  The PBOC moved to improve liquidity again into China's markets.  The one-week SHIBOR rate eased another 19 basis points to 4.23%.  And the Bank of Japan head said that the country will meet its inflation target and that more stimulus is available if needed.

Europe's markets are mostly lower today after the European Commission lowered its 2014 GDP growth forecast to 1.1% from 1.2%.  The Italian PM also said that a strong euro presents risk to the recovery.

Commodities are also most lower today.  Gold prices are down to $1309 and oil prices have eased back near $93.61.  Lower prices at the pump are showing up, and that should boost consumer confidence as we head into this year's holiday season.  Black Friday talk will be here before you know it.

Trading comment: The market continues to consolidate in orderly fashion.  The last 2 months of the year are generally a strong time period of seasonality for the market.  As such, we expect participants to remain in dip buying mode and look to use weakness to add to stocks.  Big picture we still get the sense that many investors remain underweight stocks in their traditional asset allocations, which should give some legs to this bull market into 2014.

Monday, November 04, 2013

Monday Morning Musings

Markets are slightly higher this morning.  Stocks continue to consolidate near their recent highs after mostly sideways action last week. 

In economic news, September factory orders rose 1.7%.  Earnings reports continue to trickle in but most of the big earnings reports are behind us now.  The big stock event this week will be the IPO of Twitter.  Twitter raised the offering price today, and expects to start trading on Thursday.

Markets across Asian ended mostly lower, but Japan, India and Singapore were closed for holidays.  China's services PMI improved to a 14-month high of 56.3.  China's overnight SHIBOR rates continued to ease, with the one-month rate falling 56 basis points to 4.61%.

Europe's markets are slightly higher today.  Eurozone manuf PMI held steady at 51.3.  ECB member Asmussen said interest rates in Germany are too low, but didn't comment on this week's upcoming ECB rate decision.

Commodities are mostly higher, with gold prices up to $1318 and oil prices higher near $94.80.

The 10-year yield is lower today to 2.59%.  St. Louis Fed President Bullard was on CNBC this morning, and said that we have seen substantial progress in the labor market.  He also said that inflation remains low and that that allows the Fed to be patient with respect to tapering its asset purchases.

The volatility index is flat today and remains at very low absolute levels near 13.25.

Trading comment: The market could have sold off more last week, but traded in a mostly sideways fashion with 2 down days last week.  It could be that the market is running out of steam and will subsequently see more of a pullback, or it could be that this is just another sideways pause for the market and from there we will see another upside breakout to new highs.  This week should give us at least a glimpse which outcome we might see.  We would certainly prefer more of a pullback to add to stocks at better prices, but we also want to remain flexible and not be left behind if stocks start to breakout from sideways consolidation patterns again.  But for now we are being patient.

Friday, November 01, 2013

Will ECB Cut Rates Next Week?

The markets are mixed in early trading.  The major indexes were mostly higher after the open, but the smaller cap indexes have given up their gains for the time being.

The euro has seen significant weakness the last 2 days after a very weak CPI reading in the Eurozone yesterday has many investors speculating that the ECB could actually cut their key interest rate at next week's meeting.  That would be a pretty surprising turn of events considering we have been hearing about how Europe is on the mend and improving economically.

In economic news, the October ISM Index rose to 56.4 from 56.2 last month.

Stocks rising on earnings: FSLR, NEE, SPR, CDW, HEES

Stocks falling on earnings: CVX, AIG, OAK, IPGP, BPL, DRQ, OMG, WCG, BRKR, GWR, ELLI

Asian markets were mostly mixed overnight.  China's HSBC Manuf. PMI held steady at 50.9.  And overnight SHIBOR rates eased for a second day with the 2-week rate down 48 basis points to 5.03%.

Europe's markets are mostly lower today with the weakness in the euro pressuring things.

The strength in the dollar is also pressuring commodities.  Gold prices are down to the $1307 level and oil prices have fallen back below $95.

The 10-year yield is getting a further boost, up 7 bps to 2.61%. 

And the volatility index is still steady around the 13.80 level.

Trading comment: If the markets end lower today it would be the third down day in a row.  But the selling has been pretty orderly and sparks more of consolidation of the recent gains that a rush to take profits and decrease equity exposure.  I would expect more backing and filling in the near term and continue to like the approach of adding to stocks that recently reported solid results.  Index ETFs offer less appeal here as the indexes are already up considerably on the year and the upside in those vehicles is likely limited.

KAM Advisors has long positions in NEE