senatefloor-300x205A Senate measure to approve an attack on Syria is expected to receive a favorable vote today.  Within 90 days, the president is authorized to initiate combat operations that do not involve troops on the ground against Syria.

Despite better global economic news including China’s Services PMI reaching a five month high of 52.8, Australian GDP coming in higher than expected and the G7 PMI being at the highest level since April 2011, uncertainty regarding Syria is likely to keep equities range bound.  Syria provides a valuation cap and an improving global economy maintains a floor.

Market internals suggest the risk-on trade remains in place as cyclicals continue to outperform defensives.

2013-09-04-AAdditionally, the 10-year Treasury rate remains near highs.  When institutional traders shift money into a risk-off mode, they often sell equities and buy Treasuries.  This has not yet occurred.

 

The Delta MSI remains bullish near the 50% market.  Money invested currently has a tight stop-loss as a small move downward in equity prices would trigger a sell signal from the Delta MSI.

 

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