Crude’s Big Move… and 4 Other Thoughts on Today’s Action
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1) Crude Move
Crude oil got a nice lift on this morning's EIA inventory numbers. We saw a substantial builds in overall and Cushing, OK inventories, but massive draws in gasoline and distillate inventories.
However, we've gotten other recent data (Saudi pumping levels, API data) that is bearish, and it's now down a little.
If crude oil can't hold, it will embolden the bears.
2) Bio/Pharma Weakness
Biotech and pharma are getting hit today on negative news from Eli Lilly (LLY) and Mylan (MYL), which is not good because health care is a key bull driver
However, they've rocketed off post-Brexit lows so it's fair to accept some consolidation after big, dramatic moves.
A move off the lows would be encouraging, though I wouldn't count on it.
3) Sentiment
The ISE Sentiment Index is reading 100 as of 10:30 a.m. ET, which is perfectly neutral. (100 calls bought for every 100 puts)
However, there is opposing action between individual names and the index/ETF sides.
On the index side, traders look pretty bearish. (just 35 calls for every 100 puts)
In individual names, the reading is 155 (155 calls for every 100 puts).
Meanwhile, the Investors Intelligence survey was released today, showing that 54.3% of newsletter writers are bullish. This is very close to II's 55% danger zone.
4) Large Cap Tech Sagging
Big tech names like Apple (AAPL) and Facebook (FB) are looking “saggy” today, for lack of a better term.
Like the health care complex, they could use a little consolidation time after posting big gains.
That said, traders may get discouraged of tech loses its leadership status, since it's played a big role in keeping equities at all-time highs.
5) Still No Vol…
Volatility is still nowhere to be found. So far today, the S&P has trade in a less than 5-point range, which is threatening to put me to sleep all over again.
I still think we'll get a volatility spike soon, but there's no sign of it yet today.
Look at oil.
We've gotten a lot of news is the past 18 hours, and it's still barely doing anything.