1) US Economic Data Comeback
US economic data continues to firm up following a major drop in momentum since July.
In the past week, we've seen decent new home sales, Markit Services PMI, durable goods, Chicago PMI, GDP, jobless claims, and ISM Manufacturing numbers.
Check out this chart of the Citi US Economic Surprise Index — this could be the start of a new trend following a collapse in expectations:
Some reports have been some clunkers, but overall, the strength of data relative to expectations is improving into Friday's big NFP report.
2) Traders Aren't Sold on the Fed Just Yet
A lot of traders believe a December rate hike is a foregone conclusion.
The numbers say otherwise.
Fed funds futures imply a 61% probability of a December rate increase, so the market's not buying in whole-hog.
This brings us back to this week's NFP report, which could move the numbers one way or the other.
I'd especially be watching…
Call me crazy, but doesn't this Gold (GLD) $125ish level look pivotal?
Gold has been making lower highs, and I'd assume that a big NFP report on Friday could mean a very ugly break of this $125ish support level.
There's been a lot of talk about a possible head & shoulders forming over the past few weeks, but this bigger-picture pattern looks more important.
4) Is Twitter Still in Play?
Today, Bloomberg reported that Google (GOOGL) is considering a bid for Twitter (TWTR).
Google has perennially been seen as a logical buyer for Twitter because of the latter's strength in real-time search.
But the real good news for Twitter longs is the sheer number of rumored suitors floating around — Salesforce.com (CRM), Disney (DIS), and Microsoft (MSFT) have also been mentioned.
This way, if one alleged suitor leaves the picture, we've still got others to prevent an all-out collapse.
But I'll still only believe this deal when I see it.
Mark your calendars for Twitter's Q3 earnings report on October 25 — it's gonna be a big one!
5) A Boom in Call Options?
The ISE Sentiment Index, which is my favorite short-term sentiment indicator, is reading 189 this morning as of 10:50 a.m. ET. That's 189 calls for every 100 puts, which means rampant bullishness, at least on an intra-day basis.
Perhaps ironically, we are seeing lots of activity in GLD.
NFLX, TSLA, BMY, and CAB are also active. (TSLA announced strong sales, CAB is being taken over)