Nothing accomplished...

...there or here!.    No problem, money saved!.    It seems there's just never enough panic or excitement to set this market in motion to move heavily into one direction.   Of course, we are talking about a market, excluding the financials here.     After the big intraday ups and downs, what many people care about the most is the final box score.  The score was basically a draw,  but it surely picked up a few eager beavers just before noon, only to send them to the showers an hour later.    At the end of the day, the safest conclusion we can come up with is that we aren't going to get a "sustained" bounce of any length anytime soon , what we mean is let's just stop anticipating one from oversold conditions.   Damn, we've been here in oversold levels for a month now!.   Maybe, if we don't wait or talk of one,  one will appear miraculously. 

Why no reversal of significance yet ?   The biggest culprit is the financials.   XLF hit a new multi year low and most of the popular financials closed near the low of the day.    There's really no real catalyst to drive down the financials other than the general feeling of "nobody wants to own them"!    We have talked about the financial companies and sector in general many times in the past on this site.    The feeling has been that "if you don't want a terrible year, you need to avoid them"!    Everybody agrees these days that there's value in some of these financial companies, but the high probability is that you won't see any return from these investment for a long time simply turns people away.

We are at the beginning of a new earnings season and things are not looking good for this market.   We noted a few precautions yesterday as to how it's shaping up.   Despite this most recent decline, we feel this market is still only pricing slowed growth and/or slight disappointment from most companies.    What if many popular companies pull a NVDA out of their report?    That'll set some panic for sure in the market.    Basically, this market is still not pricing in a full blown recession or a very troubled economy.    We don't blame this market because you can't simply assume there's fire if you smell smoke!     The most important issue these days, in our opinion, is still inflation.      This is definitely a topic that has been largely avoided in the last two decades because the new technology essentially kept the inflation in check for the longest time.     Well, as evidenced by the increasing cost of raw material, the balance seems to be tipping.     Now, we don't know if we are going to enter a high inflation era or not.   We also don't know how long this inflation will stay with this market.   One thing we do know at this point is that inflation is a real possibility and it's more probable than many people would like to admit.     Bear this in mind, the tools that Fed used to speed up the recovery of a troubled economy may not be applicable this time.     Of course, we are referring to a sustained low interest environment.     Basically, our macro view is that we may see some nasty surprises in this earnings season that can potentially cripple any chance of a sustained summer rally.  Technically, it should come, but this market is becoming very fundamental.

Commodities were hammered all over the place, including the energy, ........as for stocks, E&P Shales felt the vibrations ,..also, GDP announced in AH that they will be issuing a secondary of up to 3.4 million shares (10% OS).   Stock is down and this is something we have to be prepared for in the coming weeks from more than one E&P shale.   It comes with the territory.    Basically, if a company in the Shale region wanted to develop the assets on their own,  it is understood that they need major financing to do so.     We are just a bit surprised that GDP needed more money after they socked away 175+ mill from CHK not too long ago.      In our opinion,  it's probably smart to just sell your assets to a cash rich player, if you are smaller players like GMXR or PVA.     In any case,  a substantial pullback from any secondary news in Shales should be considered a good opportunity to look out for , but not on days energy is getting licked!.    Shales are exploration companies and of course obtaining cash is essential for any possibility of future development.    It's a quite different than Solars raising cash, you know what we mean. 

Both steels and coal plays have eeked out a slight gain today. So what, they also sucked in a few before noon and never regained their highs.  We know it's tough to see some up 5%+ in morning, but damn they are still way off Wednesday's high's.    This gain end of day is understandable given the nasty sell off they endured last week.    As of this moment, we aren't looking to accumulate or establish new positions in any commodity sector.    We are sticking to sitting by the dock of the bay wasting time and watching for some intraday setups for the most part.    A potential catalyst to revive the momentum of these companies would be some bullish earning report/guidance, but after SCHN you now know the craziest numbers may be priced in.    We will definitely be looking out for those, but not chasing until we feel a change of heart in the market.

Bottom line,  it feels like this is going to be a difficult summer to trade.    Just like in the past summer, we are only going to looking at the most obvious and easiest setup to trade.  Something will come, just be patient and avoid sucker bets like yesterday before lunch.  This means that we'd be spending more time waiting than actual trading.   It served us good in the past and will probably do so again this time.