Category: Daily Market Update

Daily Market Update – October 7, 2014 (CLose)

It’s hard to say whether yesterday was a disappointment or not.

While it’s true that the early morning gain never quite survived, neither did it give way to any kind of tangible profit taking.

But even if you had doubts about yesterday, there can’t be any about today.

This morning appeared ready to start exactly where yesterday left off. The market was pretty ambivalent yesterday and had a hard time deciding whether to finish higher or lower. This morning it looked as if there would be a mildly lower opening with no real news to fuel anything.

That changed, but without any real obvious reason and the market ended with another of these 200+ point moves, but in the wrong direction, unless you’re really into volatility.

Even I’m not that into volatility.

While yesterday had the Hewlett Packard news which by all appearances was a dizzying spin of why the split up was a reflection of Hewlett Packard’s success, today had nothing.

Other than all of the scheduled speakers this week and tomorrow’s FOMC Statement release, that pretty much describes the rest of the week.

In the meantime the market had been sitting just short of the mid-way point for its 2 year pattern of mini-corrections. It was getting ready to start the morning about 2.3% below its high from a few weeks ago, so it was really anyone’s guess where the next stop would be be.

Tomorrow morning the only thing to guess is whether we will see the market takes us to and perhaps beyond that 5% mini-correction level that we last saw at the very end of July, as the market ended today about 3.6% below its high.

Tomorrow comes the next challenge.

With the anticipation for the last FOMC Statement being so focused on the phrase “considerable time,” as it was being used to describe when the increase in interest rates would start, somewhere along the line will come the realization that with each passing month, by definition that “considerable time” has been shortened by a month.

Sooner or later there will be no time left and rates will go higher.

Although it shouldn’t come as a surprise, you can be reasonably assured that the market will react as if it was a surprise and then will bounce back from the shock that should never have been a shock.

But that scenario may not have to play out for so
me considerable time.

What will play out almost immediately will be earnings, that really get going tomorrow, even though the traditional leader of the season, Alcoa is no longer in the DJIA.

This earnings period will be interesting because the likelihood is that retail will have some good news, but energy will have some bad news, especially as it gives forward guidance.

If you asked anyone what the future would hold for the energy sector, given all of the geo-political risk, they would have had to have been crazy to not believe that the future for profits was incredibly bright. But this period in time is markedly different, as even with all of the world’s craziness energy prices (and precious metals) are plummeting.

They will surely go up at some point, but as the expression goes “if not now, when?”

After a couple of purchases yesterday, I wouldn’t have minded adding some others for the week, but am still not committed to it. If anything, I may be interested in buying back some of last week’s assigned positions, but I’m not too convinced that I’ll have much interest to break out beyond those names at the moment. As the afternoon progressed and there was a sell-off on top of the already weak numbers, there was even less reason to make those purchases.

As has become the pattern of late, unless there’s a spike higher to open a session, giving an opportunity to sell calls, the likelihood is that sitting back and watching to see how that early trading evolves is the way to go. That was definitely the way to go today and it was also a good idea to resist anything looking like a value.

With the exception of last Friday when the market indicated higher and stayed that way, these early morning trading patterns have had very poor predictive value. Lower opening trading hasn’t offered much in the way of value and higher opens haven’t led to higher closes, for the most part.

I had suspected that the typical FOMC pattern would be in play today, unless, as last month, someone thought to have an inside track, such as the Wall Street Journal’s Jon Hilsenrath, offers an opinion on what tomorrow will bring. Otherwise, there was very little reason to suspect any kind of accentuated movement in either direction, as most traders are playing very conservatively now.

Most of the time that’s not too bad of an idea.

Today, though, they were neither conservative nor in panic, but maybe a blow off from some kind of panic is better than this seemingly unwarranted syncopated sell-off that has been going on for the past three weeks.

But who knows, maybe Janet Yellen will give us a brief respite tomorrow.

Daily Market Update – October 7, 2014 (9:15 AM)

It’s hard to say whether yesterday was a disappointment or not.

While it’s true that the early morning gain never quite survived, neither did it give way to any kind of tangible profit taking.

This morning appears ready to start exactly where yesterday left off. The market was pretty ambivalent yesterday and had a hard time deciding whether to finish higher or lower. This morning it looks as if there will be a mildly lower opening with no real news to fuel anything.

While yesterday had the Hewlett Packard news which by all appearances was a dizzying spin of why the split up was a reflection of Hewlett Packard’s success, today has nothing.

Other than all of the scheduled speakers this wek and tomorrow’s FOMC Statement release, that pretty much describes the rest of the week.

In the meantime the market is sitting just short of the mid-way point for its 2 year pattern of mini-corrections. It is currently about 2.3% below its high from a few weeks ago, so it really is anyone’s guess where the next stop will be.

With the anticipation for the last FOMC Statement being so focused on the phrase “considerable time,” as it was being used to describe when the increase in interest rates would start, somewhere along the line will come the realization that with each passing month, by definition that “considerable time” has been shortened by a month.

Sooner or later there will be no time left and rates will go higher.

Although it shouldn’t come as a surprise, you can be reasonably assured that the market will react as if it was a surprise and then will bounce back from the shock that should never have been a shock.

But that scenario may not have to play out for some considerable time.

What will play out almost immediately will be earnings, that really get going tomorrow, even though the traditional leader of the season, Alcoa is no longer in the DJIA.

This earnings period will be interesting because the likelihood is that retail will have some good news, but energy will have some bad news, especially as it gives forward guidance.

If you asked anyone what the future would hold for the energy sector, given all of the geo-political risk, they would have had to have been crazy to not believe that the future for profits was incredibly bright. But this period in time is markedly different, as even with all of the world’s craziness energy prices (and precious metals) are plummeting.

They will surely go up at some point, but as the expression goes “if not now, when?”

After a couple of purchases yesterday, I wouldn’t mind adding some others for the week, but am not committed to it. If anything, I may be interested in buying back some of last week’s assigned positions, but I’m not too convinced that I’ll have much interest to break out beyond those names at the moment.

As has become the pattern of late, unless there’s a spike higher to open the session, giving an opportunity to sell calls, the likelihood is that sitting back and watching to see how that early trading evolves is the way to go.

With the exception of last Friday when the market indicated higher and stayed that way, these early morning trading patterns have had very poor predictive value. Lower opening trading hasn’t offered much in the way of value and higher opens haven’t led to higher closes, for the most part.

I suspect that the typical FOMC pattern will be in play today, unless, as last month, someone thought to have an inside track, such as the Wall STreet Journal’s Jon Hilsenrath, offers an opinion on what tomorrow will bring. Otherwise, there’s very little reason to suspect any kind of accentuated movement in either direction, as most traders are playing very conservatively now.

Most of the time that’s not too bad of an idea.

Daily Market Update – October 6, 2014 (Close)

What a wild week ahead.

There’s not too much as far as scheduled economic news goes and there may also be some peaceful short term resolution to the protests underway in Hong Kong, but there will be an incredible amount of hot air generated this week.

Today, Secretary of Treasury Jack Lew speaks and on Thursday European Central Bank President Mario Draghi speaks

In-between will be Wednesday’s release of the monthly FOMC Statement and the eager anticipation around the wording used to indicate what we all know is now coming at least one month sooner than we thought last month.

Finally, there are 12 speeches scheduled to be given by members of the FOMC this week, winding up with hawkish member, Richard Fisher, who is able to move markets very much in the same manner that the Chairman, Janet Yellen can do, despite the fact that Fisher has frequently been wrong in his opinions and predictions.

Unfortunately, he speaks just a few hours before the market finishes its trading for the week and he has a habit of sending shares lower when he focuses on the need to increase interest rates sooner.

This morning none of that seemed to matter as the pre-opening futures indicated a moderately higher opening, possibly buoyed by Hewlett Packard’s split into 2 companies. Nonetheless, 28 out of 30 of the DJIA components were higher prior to the bell ringing,

That kind of opening would have been welcome, even though I ordinarily like to see weakness to start the week.

That’s because I generally am looking to replace assigned positions and want to spend money, but don’t want to overspend.

This week, however, is another week that I’m not overly anxious to spend much money. Following 2 weeks of very confusing trading and seeing large moves in both directions with little or no provocation, it seems a little reckless to commit one way or another.

Today really did nothing to get rid of the confusion. After looking as if there might be a possible early triple digit move to the upside the market loss all of it and actually was down as low as about 70 points, only to finish the day virtually unchanged.

Rational thinking might say that there’s more downside than upside, but when has rational thinking really worked terribly well in the markets?  If rational thinking had any role most people would have missed the last couple of thousand of points gain in the DJIA while awaiting the correct
ion that we all knew to be obviously lurking.

With a handful of positions scheduled to expire this week and the same for next week’s monthly cycle end, at the moment, if making any new purchases I’m likely to look to add to this week’s expirations or possibly go out to October 24th.

In addition to the usual considerations whenever buying any new positions this week begins yet another earnings season, so that has to be thrown into the mix.

However, for the first time in a while, I’m actually optimistic about the upcoming earnings. The potential confounder will be the impact of share buy-backs. During the past few quarters those buy-backs have artificially boosted earnings per share, even as revenues were flat or even decreasing.

This time around, I expect revenues to be higher, especial in retail and consumer sections, but expect that buy backs have slowed down. That may result in higher revenues, but not the same pace of share reduction, which could lead to some earnings per share disappointments.

So as the bell was getting ready to ring, I was hoping that the strength would continue, but as we all know those kind of mild to moderate pre-open futures really don’t mean much of anything. Just as so often happens, today’s early jump higher just withered away.

Although there wasn’t much of a net change today, the constant back and forth did end up increasing volatility, which had fallen on Friday’s straight climb higher. That climb wasn’t too much, though, and did nothing really to make finding extended option opportunities any easier. Nonetheless, for now, I’d prefer to see some higher moving prices, even at the expense of volatility, if that meant a greater likelihood of putting some existing stock positions to work.

This week I’d rather see myself producing income in that manner, along with more than the usual number of ex-dividend positions, than through the depletion of cash reserves.

Like last week, it’s very possible that the two early purchases for the week may be as much as will be made, although with any further declines in eBay, Comcast and Walgreen, the stocks assigned this past Friday, it may just be time to buy those back.

Daily Market Update – October 6, 2014 (9:00 AM)

What a wild week ahead.

There’s not too much as far as scheduled economic news goes and there may also be some peaceful short term resolution to the protests underway in Hong Kong, but there will be an incredible amount of hot air generated this week.

Today, Secretary of Treasury Jack Lew speaks and on Thursday European Central Bank President Mario Draghi speaks

In-between will be Wednesday’s release of the monthly FOMC Statement and the eager anticipation around the wording used to indicate what we all know is now coming at least one month sooner than we thought last month.

Finally, there are 12 speeches scheduled to be given by members of the FOMC this week, winding up with hawkish member, Richard Fisher, who is able to move markets very much in the same manner that the Chairman, Janet Yellen can do, despite the fact that Fisher has frequently been wrong in his opinions and predictions.

Unfortunately, he speaks just a few hours before the market finishes its trading for the week and he has a habit of sending shares lower when he focuses on the need to increase interest rates sooner.

This morning none of that seems to matter as the pre-opening futures are indicating a moderately higher opening, possibly buoyed by Hewlett Packard’s possible split into 2 companies. Nonetheless, 28 out of 30 of the DJIA components were higher prior to the bell ringing,

That kind of opening would be welcome, even though I ordinarily like to see weakness to start the week.

That’s because I generally am looking to replace assigned positions and want to spend money, but don’t want to overspend.

This week, however, is another week that I’m not overly anxious to spend much money. Following 2 weeks of very confusing trading and seeing large moves in both directions with little or no provocation, it seems a little reckless to commit one way or another.

Rational thinking might say that there’s more downside than upside, but when has rational thinking really worked terribly well in the markets?  If rational thinking had any role most people would have missed the last couple of thousand of points gain in the DJIA while awaiting the correction that we all knew to be obviously lurking.

With a handful of positions scheduled to expire this week and the same for next week’s monthly cycle end, at the moment, if making any new purchases I’m likely to look to add to this week’s expirations or possibly go out to October 24th.

In addition to the usual considerations whenever buying any new positions this week begins yet another earnings season, so that has to be thrown into the mix.

However, for the first time in a while, I’m actually optimistic about the upcoming earnings. The potential confounder will be the impact of share buy-backs. During the past few quarters those buy-backs have artificially boosted earnings per share, even as revenues were flat or even decreasing.

This time around, I expect revenues to be higher, especial in retail and consumer sections, but expect that buy backs have slowed down. That may result in higher revenues, but not the same pace of share reduction, which could lead to some earnings per share disappointments.

So as the bell rings, I hope that the strength continues and doesn’t do as so often has been the case and just withers away. If that strength does continue and builds on Friday’s close, volatility will move lower and that may make it a little more difficult to find expanded option opportunities. Nonetheless, for now, I’d prefer to see some higher moving prices, even at the expense of volatility, if that meant a greater likelihood of putting some existing stock positions to work.

This week I’d rather see myself producing income in that manner, along with more than the usual number of ex-dividend positions, than through the depletion of cash reserves.

Daily Market Update – October 3, 2014 (8:45 AM)

The Week in Review will be posted by 6 PM and the Weekend Uodate will be posted by 12:00 Noon on Sunday.

The following outcomes are possible today:

Assignments: EBAY

Rollovers: CMCSA, GM, GPS, WAG

Expirations: ANF, GDX, JOY, WFM

Trades, if any, will be attemopted to be made prior to 3:30 PM EDT.

The following positions were ex-dividend this week: CMCSA (9/29 $0.22), BMY (10/1 $0.36)

The following positions are ex-dividend next week: GPS (10/6 $0.22), CPB (10/8 $0.31), DRI (10/8 $0.55), CHK (10/9 $0.10), FCX (10/10 $0.31)

Daily Market Update – October 2, 2014 (Close)

After yesterday’s 238 point drop and following all of the tumult of the past two weeks, it’s hard to believe that the market is down only about 3% from its peak of just two weeks ago.

For the most part there really hasn’t been much in the way of meaningful news during the past two weeks but the market has certainly taken on a very, very different tone.

Whether the net movement is lower or higher there’s a palpable difference even if you have never heard of the word “volatility.”

For all intents and purposes the market was neither higher nor lower today, but you certainly know that it was volatile, having traded over an 180 point range, having lost 130 points at its lowest point.

When there are no real over-riding economic themes, as there haven’t been of late, you can at least see why the market is like a ping pong ball in active play. The movements of the past two weeks have really been dizzying and there’s no indication of when the next period of stability will be at hand.

The only thing that may return some fundamentals to trading may be the beginning of earnings season next week.

It would be nice to see a market trading on something tangible, such as fundamentals.

It lately has been ignoring geo-political events, which is a good thing, but has also been ignoring the precipitous drop in commodity prices which would ordinarily have a positive impact on growth and discretionary spending.

Of course the results from earnings season could cut both ways, especially as there is an increasing consensus looking for improved numbers. The problem with those kinds of expectations is that there is more possibility for disappointment.

We all know the phenomenon of “good not being good enough,” and that consistently extends to stocks when they report their earnings.

Before next week’s earnings there was still the matter of this morning’s statement from the ECB and tomorrow’s Employment Situation Report.

What may be increasingly noted on the ECB front is that its leader, Mario Draghi may be much better at rhetoric than action.

He has moved global markets on more than one occasion by making comments suggesting that the ECB can and will do whatever it takes to meet the ECB’s single mandate, which is to maintain price stability.

Most recently the expectation has been that the ECB would introduce its version of Quantitative Easing to help keep interest rates low, but it has really done nothing.

That didn’t change this morning as Draghi announced that the ECB will continue to observe the situation. He also lambasted the EU leadership and that pleased no one and may ahve been the ultimate reason for the morning’s weakness.

So that leave’s tomorrow’s Employment Situation Report to offer some respite to the negative trend.

After last month’s disappointment we really don’t need another, but too good of a number will get ebveryone all concerned again about the prospect of rising rates, so it may be another case of bad news better better than good news.

Hopefully, whatever the news , it will be interpreted as good news. If so, it couldn’t come at a better time, but at least today didn’t move positions further, or at least much further from their strike levels. That removes some of the burden from tomorrow’s market and it won’t be requiring an explosively upside move in order to get that desired combination of rollovers and assignments.

Daily Market Update – October 2, 2014 (9:00 AM)

After yesterday’s 238 point drop and following all of the tumult of the past two weeks, it’s hard to believe that the market is down only about 3% from its peak of just two weeks ago.

For the most part there really hasn’t been much in the way of meaningful news during the past two weeks but the market has certainly taken on a very, very different tone.

Whether the net movement is lower or higher there’s a palpable difference even if you have never heard of the word “volatility.”

When there are no real over-riding economic themes, as there haven’t been of late, you can at least see why the market is like a ping pong ball in active play. The movements of the past two weeks have really been dizzying and there’s no indication of when the next period of stability will be at hand.

The only thing that may return some fundamentals to trading may be the beginning of earnings season next week.

It would be nice to see a market trading on something tangible, such as fundamentals.

It lately has been ignoring geo-political events, which is a good thing, but has also been ignoring the precipitous drop in commodity prices which would ordinarily have a positive impact on growth and discretionary spending.

Of course the results from earnings season could cut both ways, especially as there is an increasing consensus looking for improved numbers. The problem with those kinds of expectations is that there is more possibility for disappointment.

We all know the phenomenon of “good not being good enough,” and that consistently extends to stocks when they report their earnings.

Before next week’s earnings there was still the matter of this morning’s statement from the ECB and tomorrow’s Employment Situation Report.

What may be increasingly noted on the ECB front is that its leader, Mario Draghi may be much better at rhetoric than action.

He has moved global markets on more than one occasion by making comments suggesting that the ECB can and will do whatever it takes to meet the ECB’s single mandate, which is to maintain price stability.

Most recently the expectation has been that the ECB would introduce its version of Quantitative Easing to help keep interest rates low, but it has really done nothing.

Tha
t didn’t change this morning as Draghi announced that the ECB will continue to observe.

So that leave’s tomorrow’s Employment Situation Report to offer some respite to the negative trend.

If so, it couldn’t come at a better time, but hopefully today there will still be some reason for the market to move higher and offer opportunities to remove some of the burden from requiring an explosively upside move tomorrow in order to get that desired combination of rollovers and assignments.

Daily Market Update – October 1, 2014 (Close)

For many, closing out the third quarter will be a welcome thing, as it turned out to be the worst quarter since December 2012.

It’s hard to fathom that bit of news as we haven’t had a sharp decline this past quarter and we’ve had so much news of hitting new market high after new market high.

How do you reconcile both of those?

Part of the illusion lies in realizing that sometimes a small number of stocks that are performing very well may account for the vast majority of the year’s advances, as is the case in the NASDAQ, courtesy of Apple, Facebook, Intel, Microsoft and Gilead.

The rest? Not so encouraging.

The morning didn’t look like the new quarter will necessarily herald the beginning of a reversal and when it was all aid and done the decline from the previous market high found itself having been increased by 100%.

The remainder of this week still has some potentially important stock moving news as tomorrow brings news from the ECB and then Friday has the monthly Employment Situation Report.

Any of those could be impactful, but they may be so in differing directions. It would be nice if they could line up in the same way as a few weeks ago when we had such disparate events as the Scottish referendum, the Alibaba IPO and an FOMC statement all working out as hoped.

With the market now about 3% below its all time high the one thing that becomes clear is that we are less and less tolerant of any looming threats. There was a time when we considered 10% rollbacks to be a normal kind of occurrence. For the past two years it has been more like 5% and we’ve been dragged kicking and screaming into those, possibly still sensitive to the declines seen in 2007 and 2008.

Now, we get very nervous even below the 2% value, maybe because our minds are more wired to focus on the absolute size of the drop rather than on the relative size of the drop. When the DJIA gets up to 17000 those triple digit moves aren’t as meaningful as they were at 12000, yet we make no adjustment in our minds.

I know that I don’t. I don’t set the threshold by increasing my recognition of a large move to 150 points. So today’s 200+ point decline seems even larger than it really should seem.

At the mid-week point, even before today’s plunge, I wasn’t likely to be thinking about adding too much to the existing portfolio. I don’t want to spend cash reserves down and instead will be hopeful of making it out of this week with both assignments and rollovers, although I would like to see more on the assignment side of the ledger.

While it’s hard to resist what appear to be bargains you could have easily said the same thing yesterday and the day
before and now you would be sitting on the wrong side of that bargain. As was said yesterday, the challenge is really distinguishing between value and “value traps.”

Meanwhile, volatility is ticking higher and as long as the market continues having large alternating movements, including those intra-day movements, the increase in volatility can be relatively easy to take and not come at too great of a cost. Today was not the right way to do it, though.

While this week continues the challenge that had been the third quarter, next week begins yet another earnings season and it may be a very critical one as the market’s most recent weakness hasn’t really had much of a foundation. Poor earnings could finally give the market a reason to seek a lower level, especially since many are expecting some improved reports from the retail sector.

On the other hand good earnings, especially exceeding expectations could become the fuel that’s been missing for a while, even as markets did reach new highs.After the declines of this week good earnings news could easily be a springboard for some meaningful moves higher, or at least back to where we started.

So this week is one to hopefully be escaped in preparation for next week, which may herald a quarter different from the last and different from today.

Daily Market Update – October 1, 2014 (9:30 AM)

For many, closing out the third quarter will be a welcome thing, as it turned out to be the worst quarter since December 2012.

It’s hard to fathom that bit of news as we haven’t had a sharp decline this quarter and we’ve had so much news of hitting new market high after new market high.

How do you reconcile both of those?

Part of the illusion lies in realizing that sometimes a small number of stocks that are performing very well may account for the vast majority of the year’s advances, as is the case in the NASDAQ, courtesy of Apple, Facebook, Intel, Microsoft and Gilead.

The rest? Not so encouraging.

The morning doesn’t look like the new quarter will necessarily herald the beginning of a reversal.

The remainder of this week still has some potentially important stock moving news, as later this morning comes the ISM Manufacturing Index, tomorrow brings news from the ECB and then Friday has the monthly Employment Situation Report.

Any of those could be impactful, but they may be so in differing directions. It would be nice if they could line up in the same way as a few weeks ago when we had such disparate events as the Scottish referendum, the Alibaba IPO and an FOMC statement all working out as hoped.

With the market less than 2% below its all time high the one thing that becomes clear is that we are less and less tolerant of any looming threats. There was a time when we considered 10% rollbacks to be a normal kind of occurrence. For the past two years it has been more like 5% and we’ve been dragged kicking and screaming into those, possibly still sensitive to the declines seen in 2007 and 2008.

Now, we get very nervous even below the 2% value, maybe because our minds are more wired to focus on the absolute size of the drop rather than on the relative size of the drop. When the DJIA gets up to 17000 those triple digit moves aren’t as meaningful as they were at 12000, yet we make no adjustment in our minds.

I know that I don’t. I don’t set the threshold by increasing my recognition of a large move to 150 points.

At the mid-week point I’m not likely to think about adding too much to the existing portfolio. I don’t want to spend cash reserves down and instead will be hopeful of making it out of this week with both assignments and rollovers, although I would like to see more on the assignment side of the ledger.

Meanwhile, volatility is ticking higher and as long as the market continues having large alternating movements, inclu
ding those intra-day movements, the increase in volatility can be relatively easy to take and not come at too great of a cost.

While this week continues the challenge that had been the third quarter, next week begins yet another earnings season and it may be a very critical one as the market’s most recent weakness hasn’t really had much of a foundation. Poor earnings could finally give the market a reason to seek a lower level, especially since many are expecting some improved reports from the retail sector.

On the other hand good earnings, especially exceeding expectations could become the fuel that’s been missing for a while, even as markets did reach new highs.

So this week is one to hopefully be escaped in preparation for next week, which may herald a quarter different from the last

Daily Market Update – September 23, 2014 (Close)

Yesterday was just a really awful day.

It was another in a series of days that characterized last week’s 1.3% increase in the S&P 500 that on the surface seemed great but that actually along with the other major indices lagged the DJIA by quite a bit.

Last week the market was good, just not as good as you would have thought.

Yesterday was another day of lagging the Dow, but this time you couldn’t console yourself with the 1.3% gains, as the Dow itself was down triple digits and on a relative basis everything else was down even more.

Even Alibaba was down about 5%.

For those that boldly stated that the Alibaba IPO marked the beginning of the end yesterday’s trading is validation of their position.

There was a graphic making the rounds yesterday that showed market levels at the time of three previous “largest” IPOs that showed that they occurred at precisely the market’s top of the then current bull markets.

Unfortunately, they didn’t bother telling people that they cherry picked the data and omitted including other “largest” ever IPOs, such as for General Motors (the second time around), Facebook and others. They also conveniently overlooked IPOs on foreign markets that nonetheless traded in the U.S. as ADRs.

Having included any of those other IPOs would have made their graphic appear very different and would have invalidated their contention. In fact, this is what the more reflective graphic would have looked like and that’s whithout adjusting for such factors as Visa having sold about 80% of its shares at IPO, as opposed to Facebook, which only sold 25%.

Still, whenever you’re at market highs you do have to wonder whether you’re at the peak.

For those that remember the Reagan Administration, you may remember the one time director of the Office of Management and Budget. That was David Stockman, the architect of the “trickle down theory of economics.”

He just wrote a s
cathing review of Alibaba that gets a little more frightening if you saw Jack Ma’s “trust me” response to questions regarding the ability of the business going forward, particularly within the context of functioning within China.

This morning things were looking better, but not looking good. Neither for the markets nor for Alibaba.

The market was again poised for a lower open and Alibaba was indicating another 2% lower on a morning that comes after Treasury has announced new regulations regarding tax inversions and the United States and its coalition allies have attacked ISIS targets inside of Syria.

Both of those represent the “unexpected” kind of news, even though most of us knew that each one would likely be coming sooner or later. It’s just that no one really thought that today would be that day.

With surprisingly more new purchases yesterday than I would have believed to have occurred, today was a day to largely be passive and hope that the events of yesterday’s market are not a prelude to a near term sell-off. At the very least today’s nearly triple point drop in the DJIA was worse than the S&P 500 performed, as today everyone was buzzing about another signal, the death cross,” that also has no validation, yet seems to have a significant following.

It’s already clear that Treasury’s decision is having an impact on some proposed inversions, as the new regulations take place immediately. However, what is not being discussed and what is very likely going to be an outgrowth of the Treasury decision is some upcoming modification to the corporate tax code, particularly regarding overseas funds and the tax rates, that would make the desire to execute an inversion less desirable in the first place.

But as far as today is concerned that possibility is irrelevant and won’t be guiding anyone’s investment decisions, much less acting as a catalyst pushing the market forward.

While there remains little that can be identified as a catalyst to help convincingly reach new record highs and do so in a broad fashion, I wouldn’t entirely dismiss the market’s resilience. Just as there is no easily discernable catalyst, there really is no compelling reason to believe that the rug is about to be pulled out as the market isn’t really trading at an historically high multiple, particularly when realizing how that multiple has been artificially elevated through massive stock buybacks.

So pessimism may reign after yesterday and today’s performance, but the signs, other than a gut feeling and a overtly biased graph, just aren’t really there.