The market is still in a holding pattern, which, of course, bodes well for those of us who are not perma-bears, or even bearish, really. I suspect we will see a dip in the pattern, but I would see that as a buying opportunity, not a precursor to a sell off. The market wants to go up, but caution remains the word of the day, week, month, and quarter.

If the economic news from the US keeps ticking to the upside, the ECB follows through on its plan to backstop rising bond prices in Spain and Italy, the Chinese government keeps managing its economy well, and the European economy hangs tough, the market should, at best, move up, or, at worst, hold still with a slight but temporary downturn. How’s that for a lot of “ifs?” Hey, I’m just saying …

U.S. retail sales rose in July by the largest amount in five months, buoyed by more spending on autos, furniture and clothing. Retail sales totaled a seasonally adjusted $403.9 billion in July, up 21.4 percent from the recession low hit in March 2009. All major categories showed increases, a sign that consumers may be gaining confidence after the longest stretch of declines since the fall of 2008.

It is a pattern, folks. If the US consumer keeps spending through the fall and winter, this will be the fourth straight fall/winter uptick. Patterns are what market players look for and seeing patterns are what make money for market players. The July retail numbers sure look as if the pattern is continuing …

Stronger-than-expected data on U.S. retail sales and producer prices intensified the sell-off in safe-haven bonds and gold, while lifting the dollar.

Correlations are also what market players play, and the above are correlative plays. Obviously, oil is another, but that one might be a bit trickier, as geo-politics are colliding with increased inventory, which makes for volatility. Oh, and speaking of inventory …

Libya’s largest refiner will restart by August 28, according to a senior National Oil Corporation (NOC) official, after months of delays … The prolonged outage at Ras Lanuf, which can process 220,000 barrels of oil per day (bpd), helped tighten product markets, as the plant was an important supplier of jet fuel and naphtha …

So, we have more oil coming into the market while Iran is still trying to obfuscate its work with its nuclear fuel, which creates tension in the market. Maybe there is another play here, then, if oil is not the place to go. The last sentence points to reduced fuel costs for airlines. Things have been a little dicey for the airline industry this year, so checking out the fundamentals and the prices could mean a play here as well. Are there any that are slightly beat up?

Home Depot sales rose 1.7 percent to $20.57 billion, but missed the analysts’ average estimate of $20.74 billion. In the second quarter, sales at stores open at least a year rose 2.1 percent globally, including a 2.6 percent increase in the United States.

Home Depot missed analysts’ expectations fractionally, but the good news for Home Depot and the US and global economy is that sales rose appreciably. More importantly, if Home Depot’s sales are rising, what about the companies that supply the huge chain? Think derivatives …

Trade in the day; Invest in your life …

Trader Ed