Many excuses are being talked about with this morning’s U.S. employment report. But, it clearly is a very poor report. There are some good things happening but jobs tell us more about the economy than anything. So, while liquidity is king right now you have to wonder if that has an effect on psychology.
WEDNESDAY’S ACTION
Looking back at market action this week in the stock market, one has to wonder: Was Wednesday a turning point?
If you’ve been paying attention lately to the noise surrounding the markets you have heard much about divergences, correlations and perhaps even technical pattern breakdowns. I suppose if you look hard enough you can always find support for a thesis. I prefer to let the market tell me how to proceed. Given the new all time highs achieved last week it is always very difficult to climb on board the market at dizzying heights.
April 3 had a strange feel to it. Of course, we are just in front of earnings season, which is bound to be a big one based on guidance and expectations. The beginning of the month usually brings in new money flows but so far that theory has been a dud. But with some weaker economic data and then later some rhetoric and saber rattling from North Korea it seemed something was amiss.
Oh, the sellers took hold and drove prices down, but from recent all time highs (just last week). Yet we didn’t see a fear trade other than higher volatility. No rush to the dollar, not a reach for gold, silver or hard currency. Bonds were up but that was the case early from the poor economic data (ISM services). The behavior was odd, almost like a ‘set up’ to get weak hands out of stocks. We’ll see how the next several days proceed but once again this dip could have been another buying opportunity.
BOTTOM LINE
It’s dip buying until that doesn’t work.
