It’s rare to see markets in such a slow crawl higher or lower. The recently higher trend is levitating on very little volume. It will take some positive earnings news from S&P 500 heavily weighted financial companies like banks (KBE) and (XLF) to either fire up bulls or take us back down with disappointments. Wednesday, JP Morgan (JPM) and Goldman Sachs (GS) will offer their reports. Some analysts have sharply lowered expectations which may allow for earnings beats while others still expect disappointments. With financials moving above even long term levels of resistance, these reports will be much watched.

Apple (AAPL) continues its descent as the psychologically important $500 level fell and with a near 20% weighting on tech indexes (QQQ) (XLK) the sector was pulled lower. You can consider the absence of new gadgets in 2013 (that we know of) and soft supplier data a cause. In my mind the stock was just overowned. The average of street analysts’ price targets is $728. Well the holidays are just 11 months away. Below is a table from Zero Hedge showing hedge fund ownership of Apple as of September 2012 quarter end. It was all downhill from there.

Economic data Tuesday featured the following: Retail Sales depending on your view climbed (.5% vs .2% expected & prior .3%. ex-Autos & Gas .6% vs .5% expected & prior .7%); Empire State Mfg Survey was still weak (-7.78 vs 0.00 expected & prior -8); and, PPI was lower (-.2% vs -.1% exp & prior -.8%: ex-food & energy .1% vs .2% exp & prior .1%)

The dollar (UUP) was stronger but oddly so too was gold (GLD). With the latter there was some rumblings as to why the German Bundesbank would want to take physical possession of its gold from the NY Fed. The old joke with Swiss banks is they, as transactions were made, would just move the metal from one side of the vault (seller) to the other (buyer). Those carts were on wheels naturally. Bernanke also got gold going higher with remarks at the U of Michigan basically saying unemployment is improvement but is too slow as is the economy while inflation is tame. (As long as they calculate unemployment without including those falling off the roles and inflation calculated as they do, then he’s right.) Commodities (DBC) overall were mixed as oil (USO) fell while grains (JJG) were higher. Bonds (TLT) rallied.  

Volume remains frustratingly light as if all traders left the floor and didn’t turn out the lights. Breadth per the WSJ was modestly positive.

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