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| | | Rumors & Liars | | | | | | The market was caught between the facts of the Fiscal Cliff negotiations going poorly, thus the weak open, and rumors of the exact opposite driving the market up like a gust of air under Marilyn Monroe’s skirt.
The Dow was down -100 points, and just before the close it was trading over +100 points; a 200-point reversal.
Off of the low of 1383.00 in the ES, the market exploded with no scheduled news. Shortly thereafter, however, we learned that House Speaker Boehner announced the SAME news as he did on the 16th: there “may” be a resolution to the “Fiscal Cliff”…with no details.
But who needs details when people no longer trade the markets? SkyNet is in charge.
On November 16th, politicians organized a press conference to do one thing, and one thing only: to rig the stock market. On this day the markets were in the depths of a very steep stock market decline; the ES was down ~130.00 points from its recent high and looked very weak. Politicians came to the media with NO details – just hyperbole. And since, as mentioned above that the markets are no longer traded by humans, the headline-seeking algorithms bought like mad.
The same happened Wednesday.
With the markets once again in a sudden overnight sell-off because the truth of NO agreement hit the tape, the politicians came out to rig the market yet again. Speaker Boehner regurgitated the prior non-truth, non-specific statement that all is well and there could be an agreement.
But that wasn’t enough. In the late morning session the president arranged a press conference to say the same thing: “maybe.” SkyNet headline-seeking algorithms drove the market even higher when the press conference ended.
This is starting to be like the farcical Eurozone/Greek nonsense.
Here’s the truth: taxes WILL be hiked effective immediately and spending will be “promised” to be cut; however, spending will NEVER be cut.
In the headline of this piece you read “Rumors & Liars” – and we discussed the rumors; so who are the liars? Lol…of course, they are the politicians!
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| | |  | | | | Currency Spotlight | | | | Supportive comments regarding a resolution to the fiscal cliff have been detrimental for the U.S. dollar. The risk appetite trade of buying Australian dollar, kiwi, and the loonie against the U.S. dollar will most likely remain the general playbook by most money managers over the next couple of quarters. The up and down attitude of the financial markets will likely persist. It might take another day before we hear U.S. lawmakers’ negotiations reaching an impasse. If that does occur, the risk off trade will return and the dollar will recover some of its losses. Until we have clarity and reform regarding the U.S. budget and tax hikes, we will not see commodity currencies take off. Traders however should be cautioned not to go all-in, as the U.S. economy is weak and if it enters a recession despite QE infinity, a wave of furious selling may dampen commodity buyers.
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|  | | | | Watch List | | | Well seeing the market action today, the one word that comes to my mind is "WOW". We saw the market dip down over 100 points only to recover to close UP 105 points. Are you kidding me? The market reacted that favorably to speculation that there MIGHT be a small resolution to the Fiscal Cliff?! No, I say the market rallied when the headline searching Algo's got turned on by the Wall Street journal article that came out. When the Algo's run wild, look to buy, buy, and oh yeah BUY all day long.
GMCR continued their run off earnings and finished up over 27% today. This for a company that finally beat earnings estimations by a decent amount, but only after they had to revise it down so much they had no choice but to beat it. Now I do not know where this will end, but I just feel it is over valued at this point. Essentially the truth will come out on this company, and when it does, it will be a resounding downfall to the teens if not the single digits. With shady accounting practices and tighter profit margins, along with slowing capital growth, I can't see a strong upside play to GMCR after this strong push. It may continue to go up for a few more days, but I say watch the downfall in the near future.
Lets see if the market can carry this momentum. I had stated a couple of weeks back that if we can get above the 1370-1375 mark in the S&P, trade and close above that level, then it's a signal for the turn around into a Bull market. The S&P closed at 1409 today and looks to be on its way to testing the 2012 year highs. While I still feel the market will be going back and forth quite a bit here, I do believe we will slowly progress higher and higher going into 2013. Open Position: IBM Stocks to Watch: AAPL GOOG PCLN AMZN EBAY GMCR NFLX FSLR BAC C IBM RIMM .
Focus was on retail stocks today in the market. While stocks like Target(TGT) and Walmart(WMT) took a slight hit, Ebay(EBAY) and Amazon(AMZN) made moves to the upside today. Pretty easy to see on a day like "Cyber Monday" where the traffic to these websites almost double, if not triple on this day, as people scramble to get the hot deals advertised by the 100+ emails that must have hit your inbox starting at 4am cst. It will be interesting to see if these are short term plays, or if these stocks can maintain the momentum for the holiday season. I am still Bullish on EBAY and bearish on AMZN, and only time will tell if I am right. Let's shake off the access weight we have all put on since last Thursday, and take advantage of the short term plays that are showcasing themselves this week. Open Position: IBM Stocks to Watch: IBM AMZN AAPL NFLX FB BAC C GMCR FSLR RIMM
| | |  | | | | Futures Data | | | ES 1405.00 / 1388.50 POC… 1407.50 YM 12938 / 12796 NQ 2656.50 / 2626.50
Notes from the Pit
Sorry Not Available Today
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