The Day Ahead: Chants From an Unhinged Market

"Did you know that I'm utterly insane?" --Patrick Bateman, American Psycho

What we call the "stock market" is a downright impressive organism. Every second that ticks by, the market is acting kind of insane at a Patrick Bateman level, whether it's via a hotshot human or a buzzing machine. "Buy or sell?" "Good news or bad?" "Who wins and who loses?" These are a few of the issues that the market weighs daily. To that end, the market returned from a rare, non-self-induced slumber with vigor -- and absent the Friday the 13th disaster scenarios. But, deep in my very soul, I truly feel that investors ignored many important insane, silent chants from the market regarding its next move. Amid the window-dressing nonsense and the like, the market was crying, for it has been unable to shake the nasty fever it has carried around for weeks.

I began the session with an open mind, thanks to four full days of analyzing everything and anything (as evidenced on Twitter). However, when all was said and done, there was a simple "Pour one out for my fallen homie" moment -- that homie, Mr. Market.

Broad Observation: Sandy on the Brain

It was a continued dreary earnings season. Downside fundamental risk from China and Europe - which constituted a greater deciding factor -- served as wet rags to any companies that were perceived as Sandy beneficences. Of note is that Home Depot (HD) and Lowe's (LOW) finished well off their session highs. At the same time, we saw retreats in Wal-Mart (WMT) and PetSmart (PETM) -- pets needed pre-storm food, too. Also receding was RadioShack (RSH), which doesn't sell much normally, but did score traffic for phone chargers. Interpretation of all this: The market is looking at the bigger picture.

New Observations

On Wednesday, there were three focus stocks for me -- Eaton (ETN), BorgWarner (BWA), and U.S. Steel (X). The plan had been to use the market's reaction to each earnings report in order to gauge whether the market was, in fact, oversold. I would have been able to make that determination had these stocks rallied convincingly, if at all, in the face of soft third quarters and fourth-quarter commentary.

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