Very rough Friday and weekend for all involved in this country. I was aware something bad was happening Friday afternoon but not until after market's closed at 4 and I had time to really delve into the horror did the magnitude of it all really hit. Very sobering and saddening in how repetitive these actions have become in this country.
As we turn to markets, the holiday season approaches and generally this has a positive bias. This morning David Tepper, he of the infamous – "Buy Anything, Ben Bernanke will make it go up" (video here) returned to CNBC and sounded, if anything, more bullish. He made numerous references to 1999, which to me signals he thinks the Fed will eventually take the market to a bubble, even though he denied that when asked directly. I will post a videos of the segments later this morning.
The major indexes remain in a holding pattern – as posted Friday they are almost all identical with a bit of a positive bias in the Russell 2000, and a negative bias in the NASDAQ due to Apple. Speaking of that stock, it was down in premarket below mid November's lows on a analyst downgrade (typical action – downgrade after stock falls $200) but has since bounced back over that $505 area. Until this name straightens its act out it's hard to have much overall conviction.
As one can see in the yellow shade below, we still see this inverse head and shoulders pattern, which thus far has contained most of the indexes. Breaking the "neckline" (over the top of the two top yellow shaded areas) would be constructive, whereas breaking below the bottom of the two top shaded areas – not so much.
Economic news kicked off this morning with a quite poor Empire Mfg Survey but markets have shrugged it off as the "Tepper Put 2.0" seems to be dominating the news flow. We'll see a lot of housing data this week – this group has actually been one of the weaker ones of late as the "housing is in recovery" has now become accepted rather than a fringe idea. Once accepted the stock prices usually reflect the fact – at least in the near term. Another revision of Q3 GDP will hit, as do some regional Fed surveys.
Eyes will continue to focus on the fiscal cliff, European markets (which have been very strong of late) and China. Also note Japan elected a politician who is extremely easy money yesterday so expect pressure on the Bank of Japan to ease anew.
Any securities mentioned on this page are not held by the author in his personal portfolio.