3 Oct 2014 AMC - Market went through volatile period; Market regained gains as unemployment rates falls to 5.9%

3 Oct 2014 AMC - Market went through volatile period; Market regained gains as unemployment rates falls to 5.9%

Market Summary 

 European Markets Closing Prices
European markets are now closed; stock markets across Europe performed as follows:

• UK's FTSE: + 1.3%
• Germany's DAX: 0.0%
• France's CAC: + 0.9%
• Spain's IBEX: + 1.5%
• Portugal's PSI: + 1.0%
• Italy's MIB Index: + 1.5%
• Irish Ovrl Index: + 1.4%
• Greece ASE General Index: -0.8%

Before Market Opens 

S&P futures vs fair value: +9.40. Nasdaq futures vs fair value: +20.00.
The S&P 500 futures trade nine points above fair value.

Markets rallied across Asia. The student-led pro-democracy protests in Hong Kong reached their eighth day with some escalation occurring as protestors clashed with citizens who support Chinese rule.

• Economic data was limited: 
  • China's Non-Manufacturing PMI fell to 54.0 from 54.4 
  • Australia's AIG Services Index fell to 45.4 from 49.4, while HIA New Home Sales rose 3.3% month-over-month (previous -5.7%) 

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• Japan's Nikkei added 0.3%, gaining for the first time in four days as trade checked up on the 50-day moving average. Heavyweight Fast Retailing provided support, adding 2.8% after reporting strong sales for the month. 
• Hong Kong's Hang Seng reopened following the National Day holiday and climbed 0.3%. Real Estate developers saw robust gains as China Overseas Land & Investment and China Resources Land jumped 6.1% and 5.0%, respectively. 
• China's Shanghai Composite remained closed for Golden Week. 
• India's Sensex was shuttered for Dussehra. 

Major European indices trade higher across the board, while Germany's DAX is closed for National Day. Elsewhere, a poll conducted by the Catalan government indicated nearly 71% support in favor of holding the independence referendum on November 9.

• Participants received several data points: 
  • Eurozone Services PMI fell to 52.4 from 52.8 (expected 52.8). Separately, Retail Sales rose 1.2% month-over-month (expected 0.1%; previous -0.4%), while the year-over-year reading increased 1.9% (consensus 0.5%; prior 0.5%) 
  • Germany's Services PMI rose to 55.7 from 55.4 (expected 55.4) 
  • Great Britain's Services PMI fell to 58.7 from 60.5 (consensus 59.1) 
  • France's Services PMI declined to 48.4 from 49.4 (forecast 49.4) 
  • Italy's Services PMI slid to 48.8 from 49.8 (expected 49.6) 
  • Spain's Services PMI eased to 55.8 from 58.1 (expected 57.1) 

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• In France, the CAC is higher by 0.7% with Credit Agricole and Societe Generale in the lead. The two banks hold respective gains of 1.7% and 2.3%. Danone is among the laggards, down 1.1%. 
• Great Britain's FTSE trades up 1.0% with airlines in the lead. EasyJet has jumped 6.1% and International Consolidated Airlines is higher by 2.6%. Tesco trades down 3.5% to continue its recent underperformance. 
• Italy's MIB is higher by 0.7%. Financials lead with Banco Popolare, BMPS, Intesa Sanpaolo, and UBI Banca up between 1.4% and 2.9%.

U.S. Equities

• Futures point to a robust open following the strong nonfarm payroll report
• The early strength has the major averages continuing their recovery off yesterday's lows
• The VIX (16.16) is likely to test support in the 14.00 area that is helped by the 50 and 200 dma
• Nonfarm Payrolls (248K actual v. 210K expected)
• Nonfarm Private Payrolls (236K actual v. 205K expected)
• Unemployment Rate (5.9% actual v. 6.1% expected)
• Hourly Earnings (0.0% actual v. 0.2% expected)
• Average Workweek (34.6 actual v. 34.5 expected)
• Trade Balance (-$40.1B actual v. -$40.9B expected)

• S&P Futures +11 @ 1949
• Dow Futures +90 @ 16,814 
• Nasdaq Futures +23 @ 4001

Asia

• Markets rallied across Asia
• The student-led pro-democracy protests in Hong Kong reached their eighth day with some escalation occurring as protestors clashed with citizens who support Chinese rule
• China's Non-Manufacturing PMI slipped to 54.0 (54.4 previous)
• Japan's Nikkei (+0.3%) gained for the first time in four days as trade checked up on the 50 dma
• Hong Kong's Hang Seng (+0.3%) reopened following the National Day holiday
• China's Shanghai Composite remained closed for Golden Week
• India's Sensex was shuttered for Dasara
• Australia's ASX (+0.4%) gained for the third time in four days as trade overcame early losses.

Market Internals

Market Internals -Technical-
The Dow closed up 209 (+1.24%) at 17010, the S&P 500 closed up 22 (+1.12%) at 1968, and the Nasdaq closed up 45 (+1.03%) at 4476. Action came on mixed volume (NYSE 797 mln vs. avg. of 656; NASDAQ 1626 mln vs. avg. of 1637), with advancers outpacing decliners (NYSE 2124/1035, NASDAQ 1786/908) and new lows outpacing new highs(NYSE 36/80, NASDAQ 36/72).

Relative Strength:
Biotechnology-IBB +2.51%, Sugar-SGG +2.19%, Transportation-IYT +2.12%, Health Care-XLV +2.06%, Taiwan-EWT +1.96%, Cotton-BAL +1.92%, Hong Kong-EWH +1.8%, China 25 Index-FXI +1.63%, Brazilian Real-BZF +1.25%, Japan-EWJ +1.23%.

Relative Weakness:
Junior Gold Miners-GDXJ -6.95%, Volatility-VXX -6.15%, Silver Miners-SIL -5.13%, Platinum-PPLT -3.28%, Metals and Mining-XME -2.12%, Indonesia-IDX -1.59%, Australian Dollar-FXA -1.43%, Swiss Franc-FXF -1.38%, Japanese Yen-FXY -1.25%, New Zealand-ENZL -1.24%.

Leaders and Laggards

 

Technical Updates

Commentaries 

Closing Market Summary: Stocks End Cautious Week on Upbeat Note
The major averages finished a defensive week on an upbeat note. The S&P 500 gained 1.1% with nine sectors ending in the green. The rally helped the benchmark index narrow this week's decline to 0.8% after being down near 3.0% at its lowest point on Thursday.

Equities received a morning boost after the Nonfarm Payrolls report for September sailed past expectations. According to the Bureau of Labor Statistics, payrolls grew by 248,000, which was well ahead of the Briefing.com consensus estimate (210,000). The unemployment rate fell to 5.9% from 6.1%, but that resulted from a drop in the labor force participation rate.

The strong report underpinned equities and sent the Dollar Index (86.66, +1.06) to a fresh four-year high. The greenback strength weighed on commodities, resulting in a 1.4% drop in crude oil ($89.76/bbl) and a 1.8% decline in gold futures ($1192.90/ozt). The losses in the commodity space pressured the two commodity-related sectors, while the remaining cyclical groups posted gains of 0.8% or more.

Meanwhile, the energy sector (unch) underperformed throughout the session and was down near 1.0% during morning action. The growth-sensitive sector was able to return to its flat line, but could not avoid registering a 3.8% decline for the week.

Similarly, the materials sector (+0.3%) ended the week in-line with energy amid pressure from miners and steelmakers. The Market Vectors Gold Miners ETF (GDX 20.63, -0.99) fell 4.6%, while the Market Vectors Steel ETF (SLX 42.83, -0.84) tumbled 1.9% with Cliffs Natural Resources (CLF 8.32, -1.68) pacing the slide. The steel company plunged 16.8% following a Nomura downgrade to ‘Reduce' from ‘Buy.'

Elsewhere among cyclical groups, consumer discretionary (+1.3%) and financials (+1.5%) displayed strength throughout the session, while the technology sector (+0.8%) ended a bit behind the market. The top-weighted sector component—Apple (AAPL 99.62, -0.28)—acted as a drag, while chipmakers could not keep up with the market either. The PHLX Semiconductor Index added 0.6%, but registered a 3.1% loss for the week.

The underperformance of chipmakers did not reflect the strength in other high-beta areas. The Dow Jones Transportation Average surged 2.1% back to unchanged for the week, while biotech stocks sent the iShares Nasdaq Biotechnology ETF (IBB 275.33, +6.74) higher by 2.5%. Conversely, the health care sector (+2.0%) spent the entire session in the lead. Shares of Mylan Labs (MYL 50.23, +3.73) contributed to the strength after the company raised its guidance.

Treasuries slumped following the jobs data, but returned to their early morning levels by the close. The 10-yr note shed four ticks, adding one basis point to its yield (2.44%), while the long bond posted a modest gain, lowering its yield by one basis point to 3.13%.

Today's participation was ahead of average with more than 796 million shares changing hands at the NYSE.

Economic data included Nonfarm Payrolls, Trade Balance, and ISM Services:

• Nonfarm payrolls added 248,000 jobs in September following an upwardly revised 180,000 (from 142,000) gain in August, while the Briefing.com consensus expected an increase of 210,000 
  • Stripping out government jobs, private payrolls added 236,000 jobs in September (consensus 205,000) after adding an upwardly revised 175,000 (from 134,000) in August 
• The hourly workweek ticked up to 34.6 hours from 34.5 hours and hourly earnings growth was flat 
  • While the unemployment rate fell to 5.9% from 6.1%, which easily beat consensus expectations of 6.1%, much of the gain came from the 97,000 person decline in the labor force. Had the participation rate remained at August levels, the unemployment rate would have remained at 6.1% 
• The U.S. trade deficit fell to $40.10 billion in August from a downwardly revised $40.30 billion (from $40.50 billion) in July, while the Briefing.com consensus expected an increase to $40.90 billion 
  • The goods deficit increased to $59.90 billion in August from $59.80 billion in July and the services surplus increased to $19.80 billion from $19.50 billion 
• The ISM Non-manufacturing Index fell to 58.6 in September from 59.6 in August, while the Briefing.com consensus expected a drop to 58.9 
  • Even though the index declined in September, the trends show robust economic growth with both business activities/production (62.9 from 65.0) and new orders (61.0 from 63.8) remaining above 60

There is no economic data on Monday's schedule.

• Nasdaq Composite +7.2% YTD 
• S&P 500 +6.5% YTD 
• Dow Jones Industrial Average +2.6% YTD 
• Russell 2000 -5.0% YTD 

Commodities

Closing Commodities: Precious metals sink on jobs data that came in at the top of consensus estimates; crude and nat gas declined for the week on inventory data

• Dec Gold sold-off on jobs data that came in at the top of the estimated range, sharply selling off immediately after the release 10 min after the pit open and trending lower throughout the session, ending the day off 1.82% bringing the weekly decline to 2.2%.Today marked the first day this year the precious metal dropped below $1,200/oz, nearing June 2013 lows.
• Dec silver took another leg lower, reaching levels untouched since early 2010 as it tumbled 1.17% for the pit session today, bringing the weekly decline to 4.65% creating fresh 4-year lows.
• Nov crude also trended lower throughout both the session and the week, falling 1.37% and 1.15% respectively. Crude peaked at a high of $94.9 on Tuesday and steadily sold off the rest of the week.
• Nov Natural Gas peaked at $4.184 on Wednesday, reaching a low of $3.908 on Thursday following inventory data, but today's strength pared some losses, bringing the weekly decline to 2.54%. Natural gas closed near its HoD, and the 50 DMA on the daily chart now appears to be flattening out. 

COMEX Metals Closing prices

Dec Gold fell $22.10 to $1,192.90/oz

• Gold held steady in the first ten minutes of pit trading, and then sold-off sharply, dropping below $1200 for the first time this year on jobs data that topped consensus forecasts; that downtrend continued throughout the rest of the session trading 1.82% lower, near the LoD of $1,190.30

Dec Silver fell $0.20 to $16.83/oz 

• Silver followed other precious metals in the quick sell-off following the jobs data this morning, closing down 1.17%, somewhat near LoD of $16.64 and at the lowest levels since Feb 2010.

Dec Copper was flat on the day, with the pit sesssion closing at $3.00/lb

NYMEX Energy Closing Prices

Nov crude oil fell $1.25 to $89.76/barrel 

• Crude oil fell to a session low of $89.36 shortly after jobs data that topped consensus estimates, and following Wednesday's inv data that showed a draw of 1.363 mln barrels vs consensus of a build of 0.7-1.5 mln barrels 

Nov natural gas gained 10 cents to $4.04/MMBtu 

• Natural gas trended higher throughout the pit session, touching a high of $4.04 near the end of the day, closing up 2.54% even as yesterday's inventory data showed a build of 112 bcf, slightly exceeding expectations

Nov heating oil fell 2 cents to $2.64/gallon 

Nov RBOB fell 3 cents to $2.38/gallon

CBOT Agriculture and Ethanol/ICE Sugar Closing Prices

• Dec corn rose 1 cent to $3.24/bushel 
• Dec wheat rose 2 cents to $4.86/bushel 
• Nov soybeans fell 13 cents to $9.12/bushel 
• Nov ethanol rose 2 cents to $1.50/gallon 
• Nov sugar (#16 (U.S.)) rose 0.32 of a penny to 26.32 cents/lb

Treasuries

Yields Hit One-Month Lows: 10Y: -04/32..2.440%..USD/JPY: 109.76..EUR/USD: 1.2510
The Week in Review

• Treasuries booked solid gains as the S&P 500 saw back to back weekly losses for just the third time in 2013. Click here to see an intraweek yields chart.
• Raising concerns on the macro level was continued economic weakness in both Asia and Europe and a slew of mixed U.S. economic data, not to mention student-led pro-democracy protests in Hong Kong, and ebola fears as the first U.S. case has been confirmed.
• Continued economic weakness in Japan has many participants expecting the Bank of Japan to up its QE program at some point. 
• Student-led protests for democracy in Hong Kong carried on for an eighth day and saw an escalation as protesters clashed with citizens who support Chinese rule. 
• The European Central Bank outlined its ABS program, indicating asset purchases will take place for at least two years; however, no sovereign bond buying was announced.
• U.S. economic data was mostly disappointing as pending home sales (-1.0% actual v. -0.2% expected), Case-Shiller 20-city Index (6.7% actual v. 7.4% expected), Chicago PMI (60.5 actual v. 61.5 expected), consumer confidence (86.0 actual v. 92.0 expected), ISM Index (56.6 actual v. 58.5 expected), construction spending (-0.8% actual v. 0.4% expected), and factory orders (-10.1% actual v. -9.3% expected) highlighted the misses. 
• Nonfarm payrolls climbed 248K (210K expected) and the unemployment rate dipped to 5.9% (6.1% previous). Other data to top estimates included personal spending (0.5% actual v. 0.4% expected), PCE Prices - Core (0.1% actual v. 0.0% expected).
• Friday's post-nonfarm payrolls action was interesting as selling took place in the belly while buyers were in control at the long end. 
• Yields across the curve hit their lowest levels in a month. 
• Up front, the 2Y slipped -1bp to 0.563%. Action has spent the past month locked in a tight range between 0.500%/0.600% as neither bulls nor bears have been able to gain the upper hand. 
• In the belly, the 5Y eased -7bps to 1.737%. The yield pressed as low as 1.650% amid Thursday's buying frenzy, but found support at the 200 dma.
• The 10Y fell -8bps to 2.447%.  the benchmark yield tested support in the 2.400% region before probing the 50 dma (2.471%) in an initial response to Friday's jobs report. 
• At the long end, the 30Y shed -8bps to 3.134%. Mid-week buying tested the 3.100% area, but so far action has avoid a rendezvous withe September low near 3.050%.
• A flatter curve took hold as  the 2-10-yr spread narrowed to 188.5bps and the 5-30-yr spread tightened to 139.5bps.  

The Week Ahead

• There is no data on Monday. KC's George discusses the U.S. economy (20:30). 
• Tuesday's data includes JOLTS - Job Openings (10) and consumer credit (15). Treasury will auction $27 bln 3Y notes. NY's Dudley participates in an event hosted by the Rensselaer Polytechnic Institute (15) and Minny's Kocherlakota discusses "Clarifying the Objectives of Monetary Policy" (14:30). 
• Data remains light on Wednesday with the weekly MBA Mortgage Index (7) and the latest FOMC minutes (14). Treasury will reopen $21 bln 10Y notes. Chicago's Evans discusses the economy (8:30). 
• Thursday will see initial and continuing claims (8:30) and wholesale inventories (10). Treasury will hold a $13 bln 30Y bond reopening. STL's Bullard welcomes people to the St. Louis Fed's Fall Conference (9:45). Richmond's Lacker discusses "Prospects for Growth and Labor Markets" (13:15). Fed Vice Chair Stanley Fischer will take part in a CNN debate on the world economy (13:30). SF's Williams gives his economic outlook (15:40). 
• Data concludes for the week on Friday with import/export prices (8:30) and the Treasury Budget. Philly's Plosser discusses "Monetary Policy and Communications" (9) and KC's George opines on the U.S. economy (13). Fed speak concludes for the week with Richmond's Lacker talking on "Rethinking the Unthinkable: Bankruptcy for Large Financial Institutions" (15).

On other news.... 




Currencies 
Dollar Surges to Best Levels Since June 2010 on Nonfarm Payrolls Beat: 10Y: -05/32..2.99 11/32..USD/JPY: 109.75..EUR/USD: 1.2516

• The Dollar Index saw strong gains, fueled by the better than expected September nonfarm payroll report. Click here to see a monthly Dollar Index chart.
• Today's bid ran the Index through the 86.00 level, and has trade on track for its best close since June 2010. 
• The greenback is sharply higher versus all of its major peers. 
• EURUSD is -155 pips @ 1.2515 as trade presses to its lowest levels since August 2010. The single currency has seen a sharp decline since the month of May, shaving off close to 1500 pips from the highs, as weak economic data has sparked speculation the European Central Bank will be forced to launch a QE-type program to gobble up sovereign debt from the region. Eurozone data scheduled for Monday is limited to German factory orders.
• GBPUSD is -180 pips @ 1.5970 as sellers remain in control for an eighth day. Sterling has come under pressure despite assurances the Bank of England is nearing the point of a rate hike as economic data economic data has slowed from the torrid place that was seen at the beginning of 2014. Action will finish today's session at its lowest level since November.
• USDCHF is +135 pips @ .9675 as trade rallies to fresh 15-month highs. Resistance in the .9750/.9800 area will be watched closely, but action remains at the mercy of the euro.
• USDJPY is +135 pips @ 109.75 as action flirts with its best close in six years. Selling during yesterday's session probed 108.50 support, but today's face-ripping rally has run action the pair well above the level. The 110.00 area remains difficult to conquer. 
• AUDUSD is -125 pips @ .8670 as trade contends with the January lows. Today's weakness follows the downtick in China's Non-Manufacturing PMI with a close below the .8675 mark leading to the worst finish for the hard currency since July 2010. Australia's ANZ Job Advertisements are due out Sunday evening, but Australian banks are closed for Labor Day. Chinese banks remain closed in observation of Golden Week. 
• USDCAD is +95 pips @ 1.1250 as trade presses to its best levels since July 2009. Aiding today's move was the unexpected Canadian trade deficit. Canada's Ivey PMI will cross the wires Monday.

Weekly Analysis




Technical Updates

Briefing's Commentaries
Week in Review: Stocks Slide as Q3 Ends 

The stock market began the new week on a cautious note. The S&P 500 lost 0.3%, but managed to erase more than half of its opening decline. Thanks to the rebound, the benchmark index reclaimed its 50-day moving average (1976.78) after slipping below that level in the morning. Equities slumped at the open amid a couple global developments that dampened the overall risk appetite. Continued student protests in Hong Kong and a potential response from China weighed on the Hang Seng index (-1.9%), while other regional indices held up relatively well with Japan's Nikkei (+0.5%) and the Shanghai Composite (+0.4%) posting gains. Meanwhile in Europe, participants showed concerns about the Catalan independence referendum scheduled to take place on November 9. However, a twist was introduced to the story during the afternoon when the Spanish Constitutional Court announced it will block the independence vote. 

On Tuesday, the market finished the third quarter on a defensive note with small caps leading the retreat. The S&P 500 shed 0.3% to narrow its Q3 gain to 0.6%, while the Russell 2000 (-1.5%) widened its quarterly loss to 7.9%. The retreat represented the second consecutive decline for the benchmark index, which registered a September loss of 1.6%. The S&P 500 displayed modest strength in the early going with help from influential sectors like technology (+0.2%), financials (-0.2%), and industrials (-0.1%), but slid from highs amid significant weakness in the two commodity-related sectors. Most notably, the energy space (-1.2%) widened its Q3 loss to 9.2% and was pressured by a 3.6% decline in crude oil, which fell to $91.16/bbl, registering a 13.6% loss for the quarter. 

The stock market began October and the fourth quarter with a retreat. The major averages spent the day in a steady decline with the Nasdaq Composite leading the slide. The tech-heavy index lost 1.6%, while the S&P 500 (-1.3%) sliced through its 100-day moving average (1958) with nine sectors ending in the red. Equities were pressured from the start with a disappointing set of Manufacturing PMI figures from the eurozone weighing on sentiment. The region-wide reading slipped to 50.3 (expected 50.5) and was driven in part by Germany's decline to 49.9 from 50.3 (consensus 50.3). Once the U.S. session got going, the key indices slumped amid early weakness in the industrial sector (-1.9%). In turn, the growth-sensitive group suffered from notable losses in airlines, stemming from concerns about the first case of Ebola in the United States. Delta Air Lines (DAL) and Southwest Airlines (LUV) both lost near 3.5%, while the Dow Jones Transportation Average tumbled 2.5%. 

The major averages ended the Thursday session on a flat note despite showing broad-based weakness in the early going. The S&P 500 ended unchanged with four sectors in the green. Equity indices started the day near their flat lines, but commenced their retreat once European Central Bank President Mario Draghi concluded his press conference without providing much detail about the central bank's ABS purchases. Furthermore, Mr. Draghi did not hint at plans for sovereign bond purchases, which had been the subject of conversation in recent weeks. To that point, diminished prospects of a full-scale QE program weighed on markets in Italy (-3.9%) and Spain (-3.1%) with bank shares leading the retreat. As for the U.S., equities slumped across the board in the morning, but staged an impressive reversal after reaching short-term oversold conditions just ahead of 12:00 ET. At that time, the S&P 500 hit its session low of 1925.93 and the TICK reading at the NYSE neared -1500—a level typically associated with excessive selling.



Next Week In View





Economic Commentaries

Economic Summary: Nonfarm Payrolls top expectations; Unemployment rate drops below 6%
Economic Data Summary:

• September Nonfarm Payrolls 248K vs Briefing.com consensus of 210K; August was revised to 180K from 142K
• Notable Job Gainers:
• Manufacturing 3K
• Retail Trade +27.3K
• Professional and business services +37K
• Notable Job Losses
• Financial activities -1K
• The hourly workweek ticked up to 34.6 hours from 34.5 hours and hourly earnings growth was flat. Overall aggregate earnings increased 0.5%, which is strong enough to drive an acceleration in consumption growth. These gains are in-line with the improvements in the initial claims level, which recently found a new stabilization level below 300,000. The household survey added some confusion over the strength of the improvements. If the economy was moving toward full employment, then discouraged workers should return to the labor force and drive the participation rate higher. That did not happen in September. 
• September Nonfarm Private Payrolls 236K vs Briefing.com consensus of 205K; August was revised to 175K from 134K
• September Unemployment Rate 5.9% vs Briefing.com consensus of 6.1%; August was 6.1%
• September Hourly Earnings 0.0% vs Briefing.com consensus of 0.2%; August was revised to 0.3% from 0.2%
• September Average Workweek 34.6 vs Briefing.com consensus of 34.5; August was 34.5
• August Trade Balance -$40.1 bln vs Briefing.com consensus of -$40.9 bln; July was revised to -$40.3 bln from -$40.5 bln
• Exports increased by $0.4 bln, from $198.0 bln in July to $198.5 bln in August. Led by a $0.3 bln increase in nonmonetary gold, exports of industrial supplies and materials increased by $0.7 bln. Other gains were found in capital goods ($1.0 bln) and consumer goods ($0.8 bln). Automotive exports declined by $1.7 bln. Import levels increased by $0.2 bln, from $238.3 bln in July to $238.6 bln in August.
• September ISM Services 58.6 vs Briefing.com consensus of 59.6; August was 59.6
• Both business activities/production (62.9 from 65.0) and new orders (61.0 from 63.8) remained above 60. Meanwhile, production should remain strong as backlogs (52.5 from 54.5) stayed in an expansion for its fifth consecutive month

Other International Events of Interest

• China's Non-Manufacturing PMI slipped to 54.0 (54.4 previous)

Jason's Commentaries

As expected, the market went through a very volatile week as the market enters the new quarter. The week started with a lot of bearish however the employment reports managed to boost the entire market up once again. As Oct is seasonally unpredictable, we're expecting a more volatile season into earnings season. Several reasons that is affecting the market right now.
1) ISIS issues - ISIS controls several oil wells in Syria; US issuing air strikes against ISIS
2) Entering into earning seasons
3) Employment Contract
4) FOMC minutes coming out this week.

As we are expecting another FOMC minutes this week, there are speculations that the Fed might shave another $10b off the QE program. Which will ends the program entirely. On top of that, we're likely to expect the interest rates to rise in 6 months time. There will be huge money movements within different asset classes. Do expect the market buying behaviour to change.

Friday ended with a up day after a morning star formed on Thursday. We're likely to see some left over effect from last week till this week with the pricing of FOMC minutes on Wednesday. Meanwhile. The volatility is likely to be worse.

Market Call: FLAT

Date: 6 Oct 2014