Markets were met with yet another round of worse-than-expected economic data today, but it still doesn’t seem to matter. Before today’s open, weekly jobless claims were released and missed expectations. As a result, markets quickly dipped, but bulls stepped in and ramped them back higher. Also, the Philly Fed Index at 10:00 missed expectations, but weakness in stocks was likewise short lived. At current levels, equity indices are mixed. Today’s relative strength winner is the Nasdaq, up about 0.3% amid strength in AAPL. All other major indexes are trading near breakeven on the session. Metals are seeing a bounce after trading significantly lower prior to the open, as gold is off only 0.4% and silver is actually 1.1% higher. Despite continued resilience in equities, bonds are very strong today, up 1.2%.
CHART OF THE DAY
Thompson Creek Metals Company (TC) – While most mining names have been getting bludgeoned as of late, TC has seen quite the bounce since late April, up about 40% over that time frame. The shares recently gapped higher on better-than-expected earnings and have since filled that gap. Today’s bounce indicates that this area could provide some support going forward. Sentiment toward TC recently reached a bearish extreme, as short interest peaked a few months ago and has since rolled over from those levels. Should TC continue to move higher, this creates the potential for strong short-covering rallies going forward.
I like a long entry here with a stop on a close below 3.20. I would initially target a move to 4, with 6 as a stretch target.
WHAT I’M EXPECTING
Given that markets couldn’t go lower on yet another day of bad economic data, fighting this trend looks to be extremely difficult. The S&P 500 should be supported by the 1650 level going forward, so that is an area to buy on weakness going forward.