The market never seems to want to hang out at one level. We either get a rumor-punctuated downdraft, typically based on a financial rumor that has credence because there is so much out there; or we get a sense that the Fed could do something intra-day, and we take things up.
Very rarely is the market moving on earnings. It would be so easy, for example, to say, "I just heard that Ambac
(ABK)
caused an emergency meeting with the insurance commissioner." Who could think that's positive? Or how about a Fed governor who says he is "quite concerned" about the new down leg off of the ISM service number -- would you want to be short?
Every now and then, the market gets levered to an earnings report. We liked Time Warner
(TWX)
and Disney
(DIS)
, both of which showed little economic sensitivity, so the bulls could make a case of "the recession won't be that bad, because if it were, these two companies would see it" and do some buying. But that's not sustainable for a full day, and it is too easy for the sellers simply to come back on talk that there's no bottom in housing and some group of CDO Squared -- a bunch of BBB-rated bonds grouped together -- is about to be downgraded, which could really hurt Merrill Lynch
(MER)
.
That's the market we are in. I would not trust it when it's higher. That's been a sucker's game.
When it's down 200 or more, though, that's been a great point.
Sit on your hands.
There's not much cooking.
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