These 2 remain high on the radar as "tells" - I don't like their inability to break resistance - especially Walmart which, with $2 gas creating a massive tax break for Americans - should be surging pre Christmas as each day more and more of the country is forced to shop there. [Do the Bottom 80% of Americans Stand a Chance?] The problem is while $2 gas is going to help some people pay for necessities and stretch their budget a bit, it doesn't bring jobs or pay off the mortgage that 20%+ of people are now underwater on - so we still have a long road ahead.
Keep in mind monthly retail sales come out tomorrow and I think it could be just awful - we've been huge bears on retail for over a year and with the market cratering in October and sentiment finally really hitting Main Street - I just don't see $2 gas changing that one iota. Especially as the jobs picture begins to accelerate downward (the government report for that one is Friday). This is the main issue for the next 6-9 months - the economic data will get worse - not better. I think we have a real chance for 8-9% unemployment rate by this time next year even with the government's very faulty measurement (9% government unemployment means reality is mid to high teens)The rallies here and there will have to be on "hopes" of recovery 9-12 months out but "they" tried that in the spring by selling us on the "2nd half 2008" recovery and that was proven to be Kool Aid of the highest order. "They" will try again on the same thesis (just with a new date for recovery)- mind you. But many who tried that thesis this spring are going out of business. This is the problem with this bear - usually by this point in a bear market we are halfway through a recession - but this bear was brought on by housing and credit which in fact preceded the whole recession time frame. Everything is backwards this time - usually housing falters after/during the recession - not precede it. So we've already taken a lot of pain but are just really entering the heart of the traditional recession phase. So if you are an adapt daytrader or can be in and out of positions every 2-4 days - have at it. For the vast majority this is not an investable market - the casino giveth yesterday, and the house takes it all back today. Not worth it for most to even bother.
On the market as a whole we were looking for a close above S&P 985 - finally got it yesterday but obviously no confirmation day today. Pathetically the S&P is having trouble even getting it's head over the 20 day - the previous year most resistance was at the 50 day moving average. At this stage we are not even making a serious run at that level. But we quickly approach the witching hour of 3 PM which in this market can mean a 3% move in 15 minutes. So within an hour we could be back over S&P 1000... why not. Or down at S&P 940.
Back to the foxhole.
No positions
3 comments:
Joe Terranova guesting on 'Fast Money' attributes the daily volatility and sideways direction of the market as the lack of large fund investment. His thinking is that the little investor is jumping in and out and the lack of large dollar amounts results in these daily mini-spikes.
Someone else... can't remember who.. suggested that large funds won't be back in the market till the new year and to expect these movements till then.
Just about everyone expects a retest of the lows at some time soon..
jegan
I wouldn't be too surprised to see the Dow below 6000 before this mess is cleaned up. Keep your powder dry. There will be plenty of buying opportunities much later.
I'm definitely looking for 2002 lows to be retested by 1st Q or so 2009. That would be S&P 770 or so which looks to be equivalent to DJIA 7200/7300
If that breaks, support is very iffy.
If 2007 = 2000, 2008 = 2001, and 2009 = 2002 - then 2010 should be a great year to invest ;)
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