Good Day from Eastern British Colombia... A beautiful place in a troubled world. We (my wife and I) highly recommend a visit to Christina Lake and a boat trip up to the National Park. :)
Yesterday in the stock market deserves a special comment. Therefore, I'm publishing early. I absolutely claim that I have no idea where the stock market will be at the end of the day, a month from now or even a year from now. What I can say, is that yesterday's volume on the NYSE was the lowest volume this year, and there is no holiday in sight.
Secondly, I can also say the stockmarket went up when all the news was mixed (to poor) at best.
Basically, things did not add up yesterday, with the "defensive" sectors (Health Care, utilities, consumer staples and telecom) leading the way. Volume was only 558 mln shares. Also, if you go into stockcharts.com and compare S&P 500 (SPY) against Treasury Notes (TLT), you will notice that treasuries advanced along with the stockmarket. That is very unusual, and it should perk up your attention.
The DOW set a new all time closing high and the S&P 500 finished less than two points away. All this looks bullish, but there were nearly (I will even declare zero) no good fundamental reasons for the market to move like it did yesterday.
Europe is certainly in the forefront of being the leader in bad news.
Italy is back in the spotlight with reports suggesting it is unlikely a coalition government will be formed. New elections will have to be held (unless something changes in the next few hours).
The Bank of England indicates today in the "Financial Times" that banks have sterling 25Billion capital shortfal.
France announced their final Q4 GDP. It was a gulp, awful -.3%.
Today the USA has Pending Home Sales at 7:00 AM PDT (10:00AM). They are expected to be up 2.5% (which is a decrease in % from last months).
Today the stock market is down.
I will cover currencies later during the day.
For today, be careful, and be sure if you are long in the stock market (except for very long term investments) that you keep your stops close (or take profits). You can also hedge if you understand how by using options. Right here is an excellent place to buy insurance for your long positions.
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