Boo! Despite a ridiculously strong economic data point from Chicago today, stocks sold off to end the month of October on a 2 day losing streak. While we have no idea if Wednesday was the "top" of this move it would almost fit too perfectly with the last 2 rallies of 12-14 sessions; this one would have been 15 sessions. Again too soon to tell but if so the fact the pattern is repeating almost in identical fashion is a bit strange. Thus far all we have seen is the S&P 500 and NASDAQ pull back to the 10 day moving averages which is perfectly normal (and healthy). However our NYSE McClellan Oscillator went red for the first time in nearly a month which is an indicator this market is being held up by fewer stocks. The next two weeks should be interesting. For the day the S&P 500 fell 0.38% and the NASDAQ 0.28%. The Chicago PMI data was VERY strange:
Stocks briefly jumped after a barometer of business activity in the Chicago region climbed for a fourth month to 65.9 from 55.7 in September. The upbeat report on Chicago factory activity should be taken with a "very large grain of salt as it squares with no other data seen," Peter Boockvar, chief market analyst at the Lindsey Group, noted in emailed comments. "Nobody believes the Chicago PMI. Secondly, it becomes a function of good news is bad news. Does it mean the Fed pulls back," added Greenhaus.
Here is the oscillator
We are still in the latter part of the heavy earnings season; today we had Exxon report, shares rose 0.9 percent after the company reported adjusted third-quarter earnings that beat expectations.
Travel company Expedia (EXPE) had a huge day post earnings, after being in the doghouse the past few months.
Speaking of travel plays, TripAdvisor (TRIP) has been on a winning streak of late.
Some of these solar stocks - such as SolarPower (SPWR) - which have been big winners this year, are losing steam.
And as we often say bad charts often (not always) precede bad news. We see that with Sony (SNE) which has been acting weak for a while, and today had earnings to prove why!
The "White House Down" flop added to earnings woes at Sony Corp. in the latest quarter, dragging the entertainment and electronics giant to a 19.3 billion yen ($196 million) loss. The action movie's lackluster box office, especially compared with last year's releases of "21 Jump Street" and "The Amazing Spider Man," contributed to a 17.8 billion yen ($181 million) operating loss for Sony's pictures division, the company said Thursday. The company slashed its profit forecast for the fiscal year ending in March to 30 billion yen from 50 billion yen, reflecting deep-seated problems in its electronics business, televisions in particular, and the disappointing performance at Sony Pictures.
In related news, for those of you contributing to your 401ks - the max will remain the same as in 2013; $17,500.
The IRS said there wasn't a big enough increase in the Consumer Price Index, which measures inflation, to lead the agency to raise the contribution cap for 401(k)s, 403(b)s, most 457 plans and the federal government's Thrift Savings Plan for 2014. For the past two years, the IRS has boosted contribution limits by $500 due to rising inflation.