since 2008, sending it daily shortly after the market close.
The opinions expressed below are my own
Quieter. The S&P moved a fair amount intraday but compared to the recent past, it was nothing. The S&P started out down modestly (about 19 handles) but zigged and zagged its way higher over the session. We finished up about 7 handles. Today’s capital flow was *light
* at 92%. Economic news was uninteresting and most market-watchers are waiting fortomorrow’s
January CPI - ex food and energy data (0.2% est vs 0.3% prior).The correction has investors’ heads on swivels and so the worry of an inflation pickup is front-and-center. An inflation worry that causes yields in the treasury market to climb will be a negative force for equities. The chart-watching dip-buyers won’t be able to hold back that drop. I don’t have a view on the pending data though. I think that unless the number is a true outlier, the market reaction is going to be an overshoot.
Investors are still on edge so they are prone to overreact. From a quick-money standpoint, I think a small surprise would present a trading opportunity. If the number is a small beat (not hot), I think you let the market run for a hour or so and sell into it. If the number is a little hot, I think you buy after the first hour of pain…..
BUT!!!
If it’s a big surprise, forget any attempt at trying to make a quick trade. A big surprise is going to throw equities into chaos and we’ll be trying to find a whole new trading range/level.
Just thinking out loud.
Setting the CPI data aside for a moment, it sure looks like investors are calming down. As long as new news and data doesn’t re-rattle them, I think we’re in a new range.
That’s a bit of a big conditional statement but just because the market swung wildly lately, doesn’t mean that the macro data must do the same. Maybe there isn’t a new boogie-man just around the corner after all?
See youtomorrow
,-Mike