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Daily Market Update – November 18, 2015 (7:30 AM)
Yesterday was a disappointing day, as it looked as if the market was building niceley on the surprising gains from Monday. As has been the case on a number of occassions over the past month, the market just seemed to stop dead in its tracks and then headed the other way. In this case there really was no news, nor were there any of the technical factors that people like to point toward when explaining sudden changes in behavior. The third reason so frequently given, and is most likely the one that has some validity, is that programmatic selling took hold. That’s the same as saying “I don’t really know what happened, so we’ll blame it on something unseen.” But it makes sense and a single large sell order could be the trigger for others looking closely at price movements and trading volume, This morning, maybe not too surprisingly, shows a somewhat confused futures market. It really doesn’t know what it wants to do and there isn’t likely to be very much news coming today, at least not planned news to help the market decide. When that’s the case it can be a situation of “follow the leader” as yesterday’s turnaround may have been and fear and greed become more important than facts and fundamentals. With some more earnings coming this week, there’s some hope that the news from Home Depot and Wal-Mart will be more reflective of what’s going on than has been the case with Macy’s and Nordstroms, although you do have to wonder what the meaning may be if the lower end of retail is picking up and the middle and higher ends are struggling. Generally, in the past, increases in employment statistics and wages have seen relative decreases at Wal-Mart and the dollar stores and more shopping at the aspirational kind of stores, like Target and Kohls. But maybe in a really protracted period of poor job numbers, Wal-Mart may be aspirational for those that haven’t had employment for far too long of a time. That both Home Depot and Lowes reported good earnings is at least a positive bit of news, but there still has to be validation from others that there is truly something at hand pointing toward an expansion of the economy at the level of housing. For the rest of the week, I don’t think I’ll be spending any more money. I’m hopeful that the final days of the week will see some support for those positions expiring on Friday. My preference would be to see assignments, but as always, I wouldn’t turn my back on any rollovers. |
