Markets Can Frustrate: Dave's Daily

Markets were short-term overbought heading into yesterday and even today. With some selling this condition has eased somewhat.

We're still in a position to focus on earnings but, more importantly, Thursday brings market moving economic data from Jobless Claims as well. Over the past two months it seems like consensus estimates for Jobless Claims have remained at 450K. One week numbers are better and the next worse. The bottom line is unemployment statistics are just crawling along the bottom of the deep blue sea with only a blip here and drop there. Why is this? We've outsourced too many jobs that no doubt won't be coming back. Further, while we create cool "stuff" like Apple, the manufacture including parts and labor takes place overseas. It's hard to fault corporations for doing this as we live in a competitive world and there's nothing to stop this other than heavy tariffs. These would beget retaliation. But, currency manipulations should be called what they are--"unfair trade".

Overall earnings are beating expectations but how much of this is "old news" since most economic data point to at least a slowdown? This is the current conundrum.

Volume remains ultra-light while breadth was negative easing short-term overbought conditions.

SPY: It certainly appears as though bulls are a little fatigued. With volume light and the Beige Book mediocre it was time to sit things out.

MDY & IWM: Small-Caps are the most economically sensitive so it wasn't surprising to see them fade with Beige Book.

 

QQQQ: Not much to say as the chart says it all.

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