E-Mini S&P 500: Could be the top or not?

Todays Initial Jobless Claims were down 15,000 to 243,000 new claims for unemployment benefits. The Continuing Claims were down 32,000 to 1.889 million with a one-week lag time. The PPI-FD for September was 0.4 % while the previous reading was 0.2 %. The PPI-FD excluding food and energy was 0.4 % while the previous reading was 0.1 %. The PPI excluding food, energy and trade services was 0.2 % while the previous reading was 0.2 % also. The Bloomberg Consumer Comfort Index for the week of October 8th was 49.5 while the previous reading was 49.9. The Nonfarm Payrolls was a shocking low of -33,000, a very dramatic result of the hurricane effects while the last monthly employment report showed 156.000. The Unemployment Rate was 4.2 % while the last reading was 4.4 %. Private Payrolls was -40,000 while the previous reading was 165,000. The Average Hourly earnings was 0.5 % while the previous reading was 0.1 %. The Average Workweek was 34.4 hours unchanged. Manufacturing payrolls were -1,000.00 while the previous reading was 36,000. Hospitality and leisure payrolls were down 111,000 while the bars and restaurants were down 104,700. The Participation Rate was 63.1 % while the previous reading was 62.9 %. The Q2(f):2017 Real GDP was no surprise at 3.1 % while the previous reading was 3.0 %. The expansion of the US economy is both expected and welcome along with US President Trumps tax cuts and reforms. Of course, there is still the implementation of these cuts. There is a sentiment that the tax cuts may be of little worth to some. The GDP Price Index came in at 1.0 % while the previous reading was 1.0 %. The Real Consumer Spending was 3.3 % while the previous reading was 3.3 %. The strength of the market may be propelled by sentiment and the sentiment sets the stage for a higher trade. Once achieved, then a retracement may ensue. Any further sparring with North Korea can impact the market negatively along with any further doubt about the reforms and tax cuts projected by US President Donald Trump. The tax cuts and reforms seem to be stifled by the US budget deficit. The government runs on our tax dollars and the lack of those extra taxes cuts into what we pay down the deficit with. The US government needs to find additional revenue and that may be tricky. Economic growth may increase revenue, but that must come from expansion which has not come to fruition as of yet. The E-Mini S&P 500 seems unstoppable, yet this is the time to worry. This is the season where it may typically retrace. The fall is a time historically where the market has made some significant sell-offs, so this is the time to trade with caution. We remember black Monday in October of 1987. We look to Friday, October 13th as a prospective significant day. North Korea keeps the sentiment shaky along with earnings possibly skewed by the hurricanes.

US Fed Chair Janet Yellen delivered the FOMC meeting notes that inflation indications have picked up dramatically since the September FMOC. Unemployment was lower than expected. The Fed Funds Rate was left unchanged, but the December meeting may have a potential hike as she left it on the table. The Fed speaks and the market typically will react. The next Fed meeting is October 31st - November 1st. The December Fed meeting is scheduled December 12th - 13th. The labor market has strengthened and the household spending has expanded at a moderate rate. The hurricanes have caused destruction and in the near term will affect the economic activity. Higher energy costs due to the storms may boost inflation in the short term. Their stance was accommodative, but they intend to begin to wind down the quantitative easing in October by reducing its $4.2 trillion of holdings in US Treasury Bonds and mortgage backed securities. Expecting a tightening in the labor sector may over time boost wages as well thus contributing further to consumer spending. Inflation seems to still be baffling to the Fed, but may be addressed by an alteration of monetary policy. Her term ends on January 31st 2018. Trump is interviewing potential candidates at present. He may make a decision in the next 2-3 weeks. The market may react to his selection.

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Todays E-Mini S&P 500 (December) traded $2553.25 to $2546.25 an inside day. The E-Mini S&P 500 is in a bullish stance unless it can penetrate $2525.50. Fridays range for the ESZ7 could be $2552.50 to $2533.50, an inside to lower to outside day. The VIX was up +0.61 % to $9.91. The VIX may trade inversely to the E-Mini S&P 500.

The EIA Crude Oil Stocks were a draw -2.75 million barrels. The Motor Gas Stocks were a build of +2.49 million barrels. The API Crude Oil Stocks were a build of +3.1 million barrels. The API Motor Gas Stocks were a draw -1.6 million barrels. OPEC reports commercial stockpiles in OECD countries decreased to 3.002 million bpd during July. The OPEC data showed the cartel crude oil production was down by 79,000 bpd and the non-OPEC supply was decreased by 32,000 bpd for August. Energy analyst at Goldman Sachs projects that the estimated US Crude Oil demand may decline by about 900,000 bpd due to the impact of the hurricanes. Saudi Energy Minister agrees with UAE that it may be considered to extend the oil supply reduction past the March 2018 time frame.

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