Quadruple Witching on Friday as Options Expire

Futures are marginally positive along with the DAX, indicating a mixed to positive open.  The market condition scans are positive with moderate energy, pointing to another up day.  The market bias indicators continue to point to a statistical pullback in the next one to five days. 

This is quadruple witching week where options expire in both the equity and futures markets.  This tends to increase overall market volatility and may be helping to keep the markets up. 

The economic news continues to support signs of recovery, although most economists continue to believe it is still a fragile recovery.  Canada’s leading indicator rose by 1.1% in August, which suggests the economy will grow in the next quarter.  At the same time, the OECD has forecast that unemployment in Canada will continue to rise to 10%.  Inflation was higher than expected and combined with the leading indicator data suggests that the Canadian Dollar could continue to go higher.  The Bank of Japan (BOJ) has left its interest rates unchanged at 0.1%.  US initial job claims fell last month, supporting signs of recovery in the US.  FedEx (FDX), which is considered a gauge for the US economy reported earnings in line with their revised guidance and is also considered an indicator of an improving economy.  Finally, Ottawa will not block the Nortel asset sale to Ericcson (ERIC) much to the disappointment of Research in Motion (RIMM, RIM.TO)

Index	Change	%Change	Level	Phase
TSX	+59.77	+0.52%	11555.60	Bullish
DJIA	+108.30	+1.12%	9791.71	Bullish
Nasdaq	+30.51	+1.45%	2133.15	Bullish
SP 500	+16.13	+1.53%	1068.76	Bullish
Russell 2000	+12.54	+2.07%	617.38	Bullish
NYSE	+121.07	+1.75%	7038.14	Bullish

Source: Telechart

Short Term market outlook:

Bias: Scans showing a positive bias

Energy: moderate

 Primary Trend: sideways

Sector	Phase
Consumer Staples	Bullish
Healthcare	Bullish
Technology	Bullish
Utilities	Bullish
Energy	Bullish
Financials	Bullish
Industrials	Bullish
Materials	Bullish
Consumer Discretionary	Bullish

Source: Telechart