IIX and some of these indicators did close below that 200 days MA, a second close would be not a good sign but in my opinion a market friendly retail number is a good chance I think 70/30 chance for two reasons interest rates and prolonged nature of this correction, naz 'heights' and spending has some consistent relationship, I think we would see an impact of that relatively long period of correction in the number today..
I expect that CPI and retail sales would help this market, yesterday after CTXS report the NAZ was sold although Al's favourite GLW did help but could not stop the damage, I would consider yesterday action as backing and filling, too much of a weak number some think would bring a rally I would say too much of a weak number may bring a short term rally that may fizzle before we open, so for us a .3-.4 range would better where we may say a cap on retail sales and economy aggregate demand still strong, the market likes strong little lower than expectations but stable numbers if we get too strong or too weak a number in both case we will see a sell off, as too weak a number would be interpreted as number imapcting corporate profits so in a environment where earnings pre-announcments are a regular feature that may impact some stocks we are looking at an ideal scenerio modestly strong economy that can be errorneously termed as strong with a short term selling impact and a buying in later part of the day and CPI helping it further, if this market has to go higher it has to go with numbers that may be clearly indicative of strength not weakness, Friday market did not rally to much after a good PPI that core was not great at .2 for me that was again market lack of understanding we need numbers like the Friday one, falling prices are disaster, for inflation of assets fools like us were taught that a little inflation is good, who told you silly once my teacher told me 'that no inflation is cure all' look at Japan sometime we create a little inflation for economy to survive, this is too much of refined stuff for this market that looks at flashes across the screen as far as number are good we will not break 1455 on SPM that is something to watch.. |
