Rally Stop

We have had a nice shoot up yesterday after the ISM Manufacturing Index release, but the gains flattened during the day. The ISM Manufacturing Index came at 55.7 vs. 53 consensus and 52.6 last month. It’s a diffusion index, I don’t care really, but markets react sometimes.

Chart 1. ISM Manufacturing Index

Source: Bloomberg

Source: Bloomberg

Construction spending also surprised to the upside with 0.8% growth vs. -0.2% consensus and 0.8% the month before. It is running at -13% year-on year vs. -11.6% the month before. Pending home sales managed to keep the 6% growth pace from the month before. We will see what happens when tax incentives end.

Markets, across sectors are trading at approximate levels from the end of the last week.  VIX has remained around 30 and that surprises me. Maybe a additional move to the downside around the corner.

Chart 2. VIX

Source: StockCharts.com

Source: StockCharts.com

The market apparently fails to rally on good news (on surface at least). Feeling bearish. Important announcements cooming later this week, we could see big action.

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This entry was posted on Tuesday, November 3rd, 2009 at 10:41 am and is filed under Markets. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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