Beats the heck out of me what happens Wednesday but when :
The nasdaq is down 70 early and finishes up 25…
The dow is down 222 early and finishes only down 51…
The lagging Russell, for a change…is up almost 2%…
It usually means market already putting a line in the sand after a few days of distribution. Then again, in this QE, GRM (Government run markets), anything is possible. Just letting you know Tuesday’s pretty pretty good!
Except for two teases to the upside, we have been bearish on GOLD almost since the highs more than 3 years ago. We are still not bullish. But we have now taken a neutral stance as we think there is a chance a firm low has been put in. A break of recent lows would negate it.
More of the same. Commodity areas crushed. In fact, energy continues its crash. Yes…that is a slow moving crash.
BUT…after the CENTRAL BANK-INDUCED climax low, we are finally starting to see some decent amounts of distribution. As we have stated, markets were stretched, extended and overbought combined with a massive dose of bullishness. This usually leads to some working off of the move and thinking there is a chance Monday’s action starts the process. Markets have again been waaaaay overdue as they were juiced again by central bank’s maniacal easy money and printing presses.
On another note…NEW LOWS have picked up markedly. In fact, the number of new lows is indicative of a market that has already dropped a good 10%. But keep in mind, a ton of the new lows are in the energy complex and areas that are affected by lower energy prices. We already knew of these bear market areas.
Did you see the Dax yesterday…down 120 because the ECB made no noise about massive printing of money. After all, they have been teasing. But soon after, it is announced that in January, the ECB will create massive amounts. This is on top of Japan, China and all the 0% interest rates around the globe. This new round of money printing was a coordinated effort to keep markets from getting worse….and a job well done. Of course, the DAX is up 170 as we write this.
As of this second, there continues to be no sellers. Sellers last for hours right now off of the climax low in mid-October. Yesterday was another case in point. Markets teetered and then just floated back up into the close.
Oil prices down, interest rates at zero, massive money printing and finally, after all the easy money, an economy that is getting traction in the U.S. Markets remain near-term stretched and extended to the upside with sentiment being massively bullish.
Lastly, my Knicks are now 4-16 for the year. Just had to mention.