My guess is it is Wednesday. Yup, I am right, it is Wednesday. So what is the market doing this fine Wednesday?
- U.S. stock prices fell on Wednesday on growing bets the Federal Reserve may raise interest rates faster than previously thought, while anxiety over whether Scotland might break off from the United Kingdom unnerved investors in Europe, hurting sterling and boosting the dollar.
Really, are we still pulling out the Fed canard? Okay, the Scotland thing is real, and important, and I can see why the market would worry some about this, but the Scots would be crazy to split off from the UK. Sure, they will have the North Sea oil, but they will also lose the financial support of Britain, and that is no small loss. Will they decide to split? Who knows, but it does concern the market.
More than the Fed and Scotland, though, me thinks the market wants to continue its downward flow from yesterday. It is pushing in the red, but it appears stalled, as if it just can’t pull the trigger on a major sell-off, at least not yet. My conclusion then, it is on the fence.
Now, it might break down here because the Dow has fallen through the 17010 level S&P has breached a key floor at 1990 and the VIX has broken through its 50-day moving average. It is closing in on 14.
Putting any biases I have aside, the technical picture is important because so much of the trading world utilizes it. It is the ultimate self-fulfilling paradigm and once the ball starts rolling, the algos take over and the bulls move out of the way. It could spiral of control today, not because the data or even the news suggests it should; rather it will be the running-scared mentality so prevalent in the market world that brings it down.
- Ukraine’s president said on Wednesday Russia had removed the bulk of its forces from his country, raising hopes for a peace drive now underway after five months of conflict.
A while back, all the breathless media could talk about was the Ukraine crisis. Now, the reality of it settling down has zero impact on the market, or so it seems.
Then again, the bulls just might get it together to protect their technical levels. Just as the bears pile on with the running-scared mentality, the bulls make things happen with the herd mentality. If it seems as if the market will turn green, the bulls could join in and buy up the deals. My sense, though, is the bulls are not quite convinced and the bears are. As always, we will see …
The good news out there for the US consumer and, thus, the overall market is that oil continues its downward trend. It is falling hard today, closing in on a breach of its own – the $91 level. The RBOB (futures gas prices) is dropping as well, closing in on $2.50.
The other good news is Southern California and Arizona got some rain, up to three inches in fact. Sure, there was flooding, but it would be insane to complain when the pain of no rain is eased.
On that alliterative note I depart. I have had this sinus congestion for almost ten days and it is wearing me down. It makes it hard to think.
Trade in the day; invest in your life …
