{+++}Economic uncertainty has led stocks lower in four straight sessions for a cumulative loss of 3.9%. Paltry existing home sales figures for July only added ambiguity to the economic outlook.
Eight of the ten sectors were in negative territory, led by materials (-2.3%), industrials (-2.0%) and health care (-2.0%).
Tomorrow morning, one economic report is scheduled to be released, with two pieces of data, before the open: Durable Goods (Consensus 3.0%) and 2) Durable Goods — ex transportation (Consensus 0.5%).
Tomorrow before the open look for the following companies to report: AEO, BWS, CWTR, ITRN, OSIS, PERY, SYNO, and TOL.
The market is weak, no doubt, but can it stage a rally tomorrow? Tough call, the technicals are abysmal and volume is much bigger on the down days than up days, very significant considering we have been just “kissing our cousin” with volume lately.
The bears are in control now, so we have to play by their rules. The trend is down for now. The only thing in my view that gets this market ripping higher is a change in policy by the administration. I don’t care if you love Reagan, Reggae, Obama or Ralph Nadar, politics has been running this market for a while now. I hope you realize that since we have been walking upright as species, politics and the market have never been so intertwined.
I don’t rule out a rally or a plunge lower, my advice is to play about 1/3 of your normal position as things won’t get back to normal until late September. Also , turn off CNBC while you trade. Please.
I put some shorts on last night, but the next few weeks will be devoted mostly to planing and charts. This market is for the traders that “have” to play, I am one of them. I trade every day no matter what. There is always a trade. For you rookie traders, it’s a good time to take a breath and chill, maybe learn a thing or two. I will opine incessantly on good and bad things to do . I will highlight my mistakes so you will learn from them. I will put this in motion soon, no later than next week.
You salty veterans will laugh at what you hear.
P.S. I moved DNDN stop down a bit, it hit by a small margin, same with BVF as it is still live.
Joe