Well, it did not take long for the vultures to settle in to the “demise” of the market. Two down days and the “correction” has cometh.
- The Market Just Ran Out of Gas… or More Specifically, Ran Out of Buyers
Me thinks not, the market has run out of buyers, that is. At least so far today, there are buyers still hunting down bargains in this market. Heck, the DJIA was done over 200 points this morning and here we are closing the market with the DIJA sitting at a modest 52 points down and the S&P 500 finishing flat, just a tiny bit in the red.
The fact is that plenty of buyers have stepped up this day. Oh, and adding to this “off” day is the fact that the Russell 2000 Index (small caps lead) is up 21 points, the NASDAQ is up 26 or so, and Mid-Cap 400 is up eight.
True, the VIX is up a fraction and gold is jumping on “bad news,” but the US dollar is down, which makes this day just another day in a mixed market, a market looking to find solid ground.
- Investors sold equities worldwide on Tuesday after China’s market posted its worst day in five years and oil prices fell to levels not seen since 2009.
- Shares fall Greek political turmoil.
OMG! The sky is definitely falling if Greece has political turmoil, China’s market is tanking, and oil is still falling.
As I wrote yesterday, and have written many times before, the market always needs to rebalance, to pull back in a bit when it has run too far too fast. What we are seeing now is exactly that and unless I am missing something (which is highly possible) the market has no reason to correct to the tune of “major.” The fundamentals are still solid and the world is not falling apart, despite the vibrations all around us.
Funny thing about today, though, the energy and technology sectors are in the green. Go figure, oil prices in the $60 zone and the energy sector is up. Small caps and technology up as well, I wonder what this tells us?
Anyway, there really is not much to divine from yesterday and today, especially since the market seems not to have responded to the economic data that came out today, the data breathless media missed all together.
- The number of positions waiting to be filled rose by 149,000 to 4.83 million, the second-highest level since January 2001.
- Sales at chain stores slowed in the December 6 week to a same-store year-on-year pace of plus 3.9 percent, down 9 tenths from the prior week’s pace. Redbook describes the slowing as typical for early December following the late November rush.
- Wholesale inventories held steady in October, up 0.4 percent vs. a 0.2 rise in sales that leaves the stock-to-sales ratio unchanged for a third month at a lean and healthy 1.19.
- The small business optimism index surged 2.0 points in November to 98.1 for its highest reading of the recovery, going back to February 2007. The index is suddenly at its historic average of 98.0.
The above data is all good and all normal, but the market is bent on rebalancing itself. Oh wait! I’m sorry. I already wrote that.
Let me just leave it this way – let’s wait for Thursday when another round of data comes out. Let’s see what happens then. If the market is still bent on going down then, well, maybe I will have to change my thinking, but for now, I still think what I think.
Trade in the day; invest in your life …
