China tightened (slightly) its fiscal policy overnight and that, along with relatively weak Eurozone GDP growth, are the excuses for today's weakness. This continues to be a listless market that right now is only good for day traders. It has no memory from day to day and you cannot build positions. You can't read anything into "the action." Whatever worked yesterday does not work today, and so forth, which again is why the minute by minute and day by day analysis of the market that dominates CNBC and chat boards is useless right now. Anything you said yesterday about "weaker dollar," "bounce in commodities," "risk trade is back," blah, blah, is completely reversed today.
So to review:
Monday: Dollar up, commodities / risk plays down
Tuesday: (Greek rescue floated) dollar down, commodities / risk plays up
Wednesday: Waiting on details of Greek rescue - market does nothing
Thursday: (Greek rescue confirmed but no details) dollar down, commodities / risk plays up
Friday: Dollar up, commodities / risk plays down
You simply cannot build up positions in this environment. Whatever analysis you do on one day is completely useless within 48 hours. We remain in a white noise area as noted all week; I only wish that darn S&P had hit 1085 yesterday so I could have put on my shorts... I was greedy and wanted 5 more S&P points on the traditional "pre market futures run up" that I expected this morning (and have been expecting almost every other morning).
As I type this, the S&P 500 is 2 points away from where it closed last Friday. All that drama and hot air via punditry this week... and we're right back where we started. Let's see if the shorts cover in the last hour as they did a week ago. There is not as much "news risk" from the Greek rescue this week because it's already been announced in principal. Hence, I doubt we'll have a Groundhog Day with a miracle recovery in the closing hour. That would be just too cute to see on back to back Fridays. (Click to enlarge)
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