...speculation

If what seemed like market digestion over the past week, we’d have to call today a ‘puke’ of that digestion.   What’s disheartening is….“We just haven’t seen those explosive breakouts of years past, instead those wanting to be in the market..buy the dips. “ …Yes, we don’t get those breakouts to the upside and than we get these extreme sell offs that are seemingly so easy.   This one breaking up consolidation, breaking 200ma and than the 1106 and even what’s so supposedly is a psyche’ level of 1100.   Add the fact,  dip buyers were no where in sight made this even more hard to watch.   At least, it’s mostly an ETF selling program as individual stocks held up quite well.

What tipped the market?   There was no one catalyst, but a very strong 2yr auction maybe be cited as it shows de-risking signs and more ‘softer‘ than expected data was revealed.   But, the overwhelming reason in conjunction with the ‘softer’ is probably the FOMC and speculation of change  of language (“mild downgrade“) on the growth of the economy.   You can connect the dots by seeing the TRAN  down >3.5% today.  This is probably not a coincidence as the transports are a major gauge for the economy.    If this is true, it only re-inforces no hikes for a long time.  This is fine, but what the market maybe showing is it’s getting impatient here and saying the economy needs to do it on it’s own w/o their help! (low and long for rates).

If this speculation doesn’t come to fruition the market has reason to snap back hard.  If a mild downgrade does come, it may be priced in after 2 days of hard selling and we could snap back just as easily.  All in all,  this shouldn’t be a surprise as we’ve had a slew of reasons in the past month to think this was a probablility!.

AMC, we finally got a piece of 'stronger' than expected data after days of 'softer' corporate data from JBL, which bodes well likely for the RIMM/ CSCO's types.