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Daily Market Update – February 8, 2016 (8:30 AM) Last Friday was a pretty bad way to end the week, but at least you couldn’t blame it all on oil. Instead, it was likely the feeling being promoted that the Employment Situation Report contained nothing but good news. That good news, or at least the way it was packaged as being good news, was likely much more politically motivated than being based in reality. But, the reality is that market investors see good news as leading to another interest rate hike, and they see that as bad news for them. All you have to do is to look at the aftermath of the tiny 0.25% rate increase back just a couple of months ago and you would see a market that has more than just struggled. This morning the futures are down sharply as oil is down sharply, re-establishing that association that seemed as if it might finally fade away. I had some decent hopes for this week, especially after the relatively strong showing last week. Of course, the word “relative” is the key. While the market was down 3.1%, I out-performed by 3.1%. That doesn’t say much when you consider the previously felt pain in earlier weeks. At least there were some trading opportunities and I was hoping that this week would bring more of the same. This morning, though, isn’t giving any indication that might be possible or likely. There are still some big earnings reports to come this week, so you never know what could light a spark under things. One thing that could get markets moving, and hopefully in the right direction, will be Janet Yellen’s mid-week Congressional appearance. If she says anything regarding the likelihood of further interest rate increases in 2016 it is likely to cause a stir. Although if she seems to suggest that the economy may not be moving strongly enough in the right direction, that may cause a stir also, once the exhilaration wears off and people realize that we’d be better off with a justified rate increase than a sluggish economy. I don’t plan to be doing much today and am not likely to fall for the bait of dropping prices. That bait has been dangled for so long that very few are biting anymore. Most are going to miss the early part of any move higher and I include myself in that category. There has already been too much belief that things couldn’t sink any lower and all they’ve done, after an occasional head fake is to just sink lower. So I’ll wait for the bottom feeders to make their case and get a little bit fatter . . < /p> |
