Daily Market Update – July 21, 2016 (7:30 AM)
Yesterday the market made it 9 straight days with new all time closing highs, at least on the DJIA.
This morning the futures are pointing to a respite, but that likely means little.
While you can easily rationalize a large move higher or a large move lower, even as earnings are coming in that may suggest otherwise, the best of all market days would bring some stability right now.
Whether a market takes a dive or surges, the next step that makes most everyone feel better is when the market takes a rest and either slows its selling or slows its buying.
It usually takes more than a day to create a resting point that you can actually consider as representing price support.
While it may be nice to see a respite in buying, that respite may not be an indication to start adding new positions.
While developing support is a good thing, there are those sitting on gains who look at those very brief stops as being the time to lock in some profits. The longer those respites continue and the more clear it becomes that the respite is creating some price support, the more inclined investors may be to start adding positions.
For now, I just look forward to the end of the trading week and a hope that earnings continue to be positive.
One earnings report that i found fascinating this morning was from eBay, which gave very positive guidance.
What made that fascinating is that just about every analyst following eBay had said that in the event of a vote to leave the EU, eBay would be one of those companies that would suffer.
As a result, eBay’s shares were trading lower.
Now, just a couple of weeks later, they are trading much higher and the company says something completely the opposite of what the analysts had expressed.
I’ve given up trying to figure those things out. I’m still not certain what kind of voodoo analysts practice and why there is acceptance when utterances are made and buy/sell recommendations, along with price targets are given.
I often wonder whether those utterances are simply an opportunity to either push an existing position and to execute a short term strategy.
But as long as my assets are appreciating, I can put the cynic in me into a period of respite, as well..