"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.
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.