The broader market closed lower today ahead of tomorrow’s job report. It was a decent day for consolidation and we have yet to see many days like today. At the start, it appeared we were on our ways to new highs and beyond. However, after the German DAX reversed after fears over German opposition to the ECB decision of monetary policy. The ECB president Mario Draghi had made it clear he did not need a unanimous vote to proceed with further asset purchases. Yet the market sold off in the States and rallied back. Sellers crept back into the market just before after 2:30. While it appeared the close might be a brutal one, buyers stepped up stopping the overall market from sliding back towards the day’s low. Not a bad day for the markets as we saw a nice day of consolidation. Tomorrow’s job report will likely usher in some volatility, but surely a lot of bloviating from Market pundits.
We are not quite sure how one can consistently profit from the pundits CNBC ushers in daily, but what we do know is ignoring them is the best course of action. At the moment, the surveyed crowd as shown by the AAII survey is not as bullish as last week. It appears the selling after Thanksgiving and Monday’s session have put a damper on the Bullishness within the surveyed crowd. Bears jumped a bit to 25%. NAAIM exposure index stayed flat week over week with the overall exposure index at 86%. Bearish bets were cut in half from the prior week. Overall sentiment is bullish, but it does bring up a point about who is being covered by the index. Is Main Street even evolved with this rally? Is cash on the sidelines and indication this market is simply not a well-liked one and how does that translate for the market going forward? Or is this stock market simply for the 1%?
What we do know is we have a solid process and one that we can take advantage of big moving stocks. We suspect many on Main Street simply do not have the capital or even the want to be involved with the stock market. This is only our suspicion, what do you think? Leave a comment.
We continue to get fresh new buy signals from this market. While many claim we are overbought and due for a correction are likely those who have missed out on the market. Any market can remain in any condition for much longer than you can stay solvent. It is precisely why we must stay disciplined and cut our losses when we are wrong. It is quite simple, but it is very hard to master for most.
Enjoy tomorrow’s fireworks with regards to the November jobs report. All the discussion around Zero Interest Rates and new rounds of quantitative easing are all noise. Have a great weekend.
