More Sellers than Buyers

Nasdaq futures are decidedly down in Tuesday’s premarket, led lower by chips. There doesn’t seem to be any easily discernable catalyst, other than a general risk-off appetite. Creeping crude prices and unresolved tensions in the Strait aren’t helping the mood. In a thinly attended, late August session, it only takes a small spark to start momentum in either direction. Some observers may look to the disappointing forward guidance issued by FN, which trades about 12% lower in today’s premarket. That development, on its own, is probably not enough to move the markets like this. There may be some other catalyst that hasn’t yet surfaced on the news wires. Or, the premarket decline may trace back to that old, rather unhelpful mantra of the more senior prop traders: more sellers than buyers. This setup is precisely what makes August such a difficult trading period. Experienced hands will restrain themselves accordingly.

The one area with a clear dynamic remains oil. WTI crude is up about 75 cents this morning. Integrated oil names (XOM, COP) are following it higher. So long as the Iran negotiations remain at a standstill, it is reasonable to expect that oil will continue to rise.