Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Thursday, May 31, 2012

Premarket PMI Smackdown 5/31/12

Stock Market Technical Analysis

Click on above image to enlarge

This morning we had another premarket smackdown but this time it was because of a huge drop in the Chicago PMI Index, a benchmark indicator for the broad economy.  This morning's reading was 52.7 down from 56.2 last month.  The last time we had a reading in the 52 area was back in the fall of 2008 when the economy had just fallen off a cliff.  Nonetheless, WallStreet is still defending the lower line of its three year brown line mother channel, shown in the bottom left corner chart, which really should be considered a noteworthy feat in lieu of the implications of the PMI drop.  Something interesting today, the UUP really didn't close much higher than yesterday's close which has got to be some sort of relief for the bulls and also on the positive side AAPL continues its climb as shown in the bottom right chart.  Also, the VXX (VIX Futures) pulled way back down from its early morning high today.  Tomorrow premarket we will have the Friday job numbers  and if they are bad we may have yet another premarket smackdown.

Alan