Is The Stock Market Tiring?

The market was higher in early trading, but it has been fading after the first hour. 

Overnight, Asian markets were mixed with big markets like Hong Kong and China closed for the Golden Week holiday.  In Australia, the Reserve Bank cut its key interest rate 25 basis points to 3.25%.  The central bank attributed the move to a softening in the global economy and slowing growth in China.  Australia's rates haven't been this low since 2009.

In Europe, markets are slightly higher as reports continue to suggest that Spain is close to asking for a bailout.  While the markets may cheer this in the short-term, it will likely carry some sort of fiscal austerity measures that will ensure slower growth in the future.

Elsewhere in Germany, Speigel continues to say that the ECB bond buying program may be illegal.

The dollar is lower again today, but it doesn't seem to be helping commodities.  Oil prices are down a bit near $92.20 and gold prices are also lower to $1778.

The 10-year yield is flattish near 1.61%.  And the VIX is -1% to 16.10 after spiking above its 50-day average yesterday.

Trading commment: Yesterday morning I cautioned that I don't often trust a market that is too strong too early, as it leaves too much time in the day for selling and disappointing action.  That is exactly how things played out.  The SPX had been up as much as 17 points before closing up only 4 points.  Today, the SPX was up 7 points earlier but as of this post it is back to flat on the day.  I would much prefer to see a market that is flat or slightly weak in early trading but builds strength into the close.  The type of action we are seeing looks like stalling and could signal that the recent multi-month rally is tiring and could be due for more of a pause.  We haven't seen a down month since May.  And soon we will be back into earnings season.  Food for thought.