Since our note post-Monday’s trade regarding a holiday trade in ‘rare’ stuff(chit) with REE/AVL joining in, mayhem has broken out with more junkyard stocks participating. This coinciding with greater media coverage (inc. CNBC running segments seemingly every hour) that is giving daytraders a playpen year end. If this is what QE2 is about in regards to bringing money off the sidelines, it’s going to end bad for many of the inexperienced once again and they’ll be going back to their day jobs soon enough.
Luckily, we had something in the market for those looking beyond a flip possibly rearing it’s head as Ag’ related stocks climbed to 2 yr highs (see noon comment/names). As said, if 2011 begins with upgrades of the sector this might be the sign this will be a hot commodity link group to trade after a long hiatus for the sector.
All in, the broader market once again failed to breakout 1260SPX, even though breaking out on holiday volume means little, it still shows conviction buying is far from coming back. The fact Shang bounced is good, but it has to continue to take a lid off this market. The China PMI is out over the weekend and if it shows signs it peaked in November, it might offer some inflation relief. As far as Europe, which has been ‘spooky’ quiet for over 2-3 weeks is offering some Italy noise now heading into 2011. Things should get interesting soon enough from all directions..until, we still have 2 days of little disruption.