The Wrap 9/12/12


Following yesterday’s performance Telecom, Homebuilders and Financials again outperformed the broader market while the SPX closed slightly higher. Telecom rallied, led by prepaid wireless, as investors bet on M&A with Sprint/Leap/PCS occurring . Financials continued to rally as the Barclays conference came to an end – investors view the financial sector as a play on the housing recovery. Speaking of the housing recovery, homebuilders ripped today as the index  was up 3%.

Utilities and Consumer Staples, like yesterday, weighed on the S&P 500. Consumer Staples were a source of funds as money rotated out of more defensive sectors; MNST was the worst performer after Senator Durbin wrote a letter responding to the FDA. Utilities, another defensive sector, was the other big laggard as EXC and POM continued to weigh down performance. In the afternoon a lot of attention turned to Tech, as investors tuned in to Apple’s event at 1pm. Despite initially being sold after  launching the iPhone 5,  AAPL closed on the highs of the day, helping the Nasdaq finish strong.

Tech was a decent performer after struggling for most of the day.  AAPL shares were extremely volatile around the iPhone product launch but wound up catching a strong bid into the close and ended up at the highs, up 1.4%.  The consensus takeaways on AAPL seems to be that while everything was exactly as expected, the device is still very impressive and the company hopes to have it launched in 100 markets by year-end.

Commodities were mostly weaker, weighed down by lackluster performance from silver, copper, crude, and corn, while gold, wheat, and nat. gas moved higher on the day.

Treasuries continued to sell off after yesterday’s announcement that Moody’s may cut its credit rating for the US.

Materials finished the session off small on the day on the back of mixed performance from steels, base metals, precious metals

Energy traded up 0.50%, although crude finished off small following moderately bearish inventory data, while nat gas saw a 3% rally to finish the day up ~2%

There are great setups all over the place and the market may just confound rational thinking and move higher. I told you guys on the Sunday  video that 1440  SPX would be a level of resistance and we haven’t been able to break through yet.

We are now running out of positive catalysts as the European.Draghi drama now has some clarity and the big jobs number is behind us, we also saw some positive easing language out of China, so all we wait for now is the Fed tomorrow.

We will either rip higher or start a profit taking period soon, so stay on your toes.

Below is a 1 minute chart of AAPL today, what a ride.



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