Winter Begins

Now, wasn’t that interesting.  The market was perfectly set up today to show us an outside down day but managed to recover in the last hour to prevent that very bearish event.  I don’t think today could really be considered a bullish day anyway.  The Dow was up nearly 100 points this morning and bumped into 10,900 and that was the end of the up move.  Late in the day, the Dow was sporting about a 10 point gain and as mentioned was able to hold positive ground, ending up about 28 points.

Here the market is again, trying to get something going only to be pushed back.  This is happening in the face of all this bullishness about the year end rally.  One of the guys in my office came to me yesterday and asked if I’d take a bet on the Dow breaking through 11,000 by the end of the year.  I replied that I already had a big bet on that event, as short as I am.  So, of course, today when the Dow was up near that 10,900 area, he was back.  I almost took him up on the bet just to see what would happen.  But, the market made short order of that high and then proceeded back south most of the rest of the day.  

Our position is that the market has told us that the high is now just below that 11,000 mark.  The broader market is also in that same position—top is in for this move.  If that wasn’t the case, do you think the market would be having any trouble getting back to those levels over the past two days?  I will admit that the market is still well above the 10,500 range it was in for so many months but it also could go through that level in a heartbeat.  If this market is going to go down right here, the path might be fairly greased and ready to go.  

On Thursday we get the Leading Economic Indicators expected to come in around +0.5%.  Friday we get the Durable Goods Orders and November New Home Sales.  It doesn’t seem that the market is paying much attention to news these days but we wanted to let you know what was coming.  Sometimes it’s just better to know than not especially if the market decides to trade on the numbers and you don’t know what is going on.

That reminds me, we mentioned GM in last night’s post and thought we’d give you and update on it.  GM opened down Wednesday morning in a follow through from Tuesday’s after hours hit.  It immediately rebounded to a positive but spent the rest of the day leaking from the high around 20.30 to close at 19.05, another multi-decade low.  I think the last time it traded this low was back in 1983—again, so much for that theory of buying big name stocks and holding on to them forever.  And, don’t forget that as GM goes so goes the market, an old market adage.  

Dow Industrials:  10,833.73  +28.18
RYVNX:  19.14
TLT:  90.52
BEGBX:  13.23