Coolhand's Market Analysis

A positive open gave way to somewhat choppy trade, but the major averages managed to close moderately higher after yesterday's modest losses.

Around noon EST some selling pressure came into play around the time of a media report announcing the planned presence of two Iranian warships in the Suez Canal. The concern was how Israel would react to the provocation, but the market's concern didn't last long as the averages bounced back to previous levels by mid-afternoon.

The latest FOMC minutes was met with little market reaction.

Earlier in the day the January producer prices number was released and it revealed an increase of 0.8%, which was a tad higher than the anticipated 0.7%. The core PPI came in a more tame 0.5%, but was still higher than the 0.2% increase that had been expected.

January housing starts spiked 14.6% to an annualized rate of 596,000, while January building permits dropped 10.4% to an annualized rate of 562,000.

Finally, January industrial production dropped 0.1%, which was less than anticipated.

The early action had me thinking the Seven Sentinels might finally issue a confirmed buy signal, but it still fell short of that mark at the close. Here's the charts:



NAMO and NYMO flipped back to buys, but NYMO was still a bit shy of a 28 day trading high.



NAHL and NYHL are flashing buys.



TRIN flipped to a sell, while TRINQ remained on a buy.



BPCOMPQ remains steady and is flashing a buy signal.

So the system remains in limbo, but obviously sports a bullish bias. Had NYMO closed about 3 points higher and NAHL remained on a buy, the system would have confirmed a buy signal, but alas that status remains elusive as this market has been slowly chopping higher in a fashion that keeps the signals in a somewhat sideways pattern. A good breakout to the upside should do the trick, but for that to happen by Friday will depend on how the Options guys position the market for the next month's play.