It definitely remains a really strange market. Fed Governor Fisher summed things up nicely Thursday stating: "We've gone from too little liquidity to too much." He's definitely off the main Fed talking points but a little honesty explains the "more money than brains" market. The
IPO typifies this Thursday. You may not be aware of it but word on the street is only ten institutions were privileged to obtain freshly issued shares. I wonder who was favored with this gift; care to guess?
You couldn't get a collection of bad economic news much worse than what appeared today. While Jobless Claims were marginally lower given previous adjustments, the moving average of claims reached six-month highs; Home Sales were down...again; the Philly Fed reading came in at 3.9 vs 18 expected; and Leading Indicators were lower 0.3 vs flat expectations. These were dreadful but bulls brushed them off hoping for more
and extended ZIRP.
Perhaps the stupid people are the ones not playing ball, given rising markets on this lousy economic news. LinkedIn should remind everyone of dotcom experiences but it's really about too much liquidity.
Commodity prices were generally lower with economic data while the dollar was weaker and so too were base and precious metals. Bonds were flat overall.
Volume was again ultra-light while breadth per the WSJ was slightly positive.
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is a market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. When readings are +60/-60 markets are extended short-term.
McClellan Summation Index
is a long-term version of the McClellan Oscillator. It is a market breadth indicator, and interpretation is similar to that of the McClellan Oscillator, except that it is more suited to major trends. I believe readings of +1000/-1000 reveal markets as much extended.
is a widely used measure of market risk and is often referred to as the "investor fear gauge". Our own interpretation is highlighted in the chart above. The VIX measures the level of put option activity over a 30-day period. Greater buying of put options (protection) causes the index to rise.
Continue to Concluding Remarks
Markets got some mojo today due to the excitement and "excess liquidity" (per Fisher) for the LinkedIn deal.
Someone wrote earnings season was over the other day and I didn't even bother checking the calendar. (Trust but verify, right?) Anyway, earnings season is almost over as some stragglers are reporting still.
reported poor results but
beat estimates while still losing money.
I'm going to wait around for Rod Serling to "accept" my invitation to join me on LinkedIn.
Let's see what happens.
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