Coolhand's Market Analysis

It was Options Expiration day today and the market managed to stem the recent selling pressure by chopping above and below the neutral throughout the trading session. It ultimately closed mixed with the Nasdaq posting a loss of 0.6%, the DOW a 0.22% gain and the S&P 500 down a modest 0.04%.



There was one report released today and that was Leading Indicators.

The report showed that economic data is showing fairly strong signs that economic growth is increasing and should continue to increase over the winter months. Today's reading came in at 0.9% for October, which handily beat estimates of 0.5%. Among the reasons for economic growth are increasing building permits and an easing of unemployment claims. The takeaway from this is that economic growth is accelerating in spite of the European crisis.

Those are not my sentiments, but simply what the report reflects. However, I will say that I am seeing numerous commercial construction sites around the area that I live in Orlando, FL so the report may indeed be as accurate as described.

Here's today's charts:



NAMO and NYMO turned up a bit today, but remain well in negative territory and in sell conditions.



NAHL and NYHL also turned back up a bit, also remain on sells.



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



BPCOMPQ dipped just a bit lower today and also remains on a sell.

So the signals are mixed, but options expiration tends to be somewhat supportive of the market anyway, so there's not much value in analyzing the day's trading.

The question now is what happens next week?

There are numerous potentially market moving reports and events taking place prior to Thanksgiving. On Monday we'll get the existing home sales report, Tuesday we'll get the final GDP number for the prior quarter and the FOMC Minutes. And Wednesday we get the durable goods orders, personal income and outlays, and jobless claims reports. Wednesday is also the deadline for the Super Committee to reach a deficit reduction agreement.

So while today's trading was somewhat supportive, it was OPEX, which can mask a market's true nature. And after the technical breakdown in the charts the past couple of days, it still remains to be seen just how robust the Seven Sentinels sell signal is for the short term. I am not sure what to expect in the short term, but longer term I am definitely playing it defensively.

Stop by Sunday evening when I'll have next week's tracker charts posted. See you then.