No Deal On Debt Ceiling Yet

The market is trading in lackluster fashion in early trading, after overseas markets fell overnight and no new news on the debt ceiling has materialized.

Ongoing concerns about the financial situation in Europe led to large losses in Asia overnight, and European markets were down this morning as well. Asia's declines were also led by Japan's central bank lowering its growth forecast.

Earning season kicked off last night with Alcoa, which was somewhat of a non-starter in terms of excitement. But semi stocks are lower across the board today after MCHP warned last night and NVLS traded down after reporting also.

The talks on the debt ceiling seem to have hit another impasse, which is acting as a big distraction for the market. Markets hate uncertainty, so whatever the deal is that is going to be cut in terms of tax reductions, etc., let's just get it done already and move on.

The FOMC will release its minutes from their last meeting today, but it shouldn't contain any real surprises given that Bernanke already held his press conference after the meeting and answered questions. Expect language about how the economy has slowed down, the recovery is uneven, and monetary policy needs to remain accomodative.

The dollar is higher again today, weighing on most commodities. Oil prices have dipped below $95, while gold prices are just above even around $1551.

The 10-year yield is lower again, now back to 2.90% after a big 2-day plunge. The VIX is up another 5% today to 19.42, nearing the psychologically important 20 level.

Trading comment: The SPX touched its 50-day average at 1315 this morning, as so far has bounced off of that level. The Nasdaq is still above its 50-day. After last week's rally, the markets are still overbought, though they are relieving that condition quickly. With earnings season upon us, I prefer to wait to see how my favorite companies report. No sense in buying ahead of what might be a disappointment in terms of guidance or just the market reaction.