China lid..
Wednesday, December 29, 2010 at 07:54AM Pretty well a repeat day as US markets shrug off another 1.7% down Shang day and grinds higher. More and more, the action in the Shang is becoming worrisome and won’t be ignored for too long if it continues. Right now, it’s keeping a lid on things in US markets.
Other repeat activity include things such as resiliency, dip buying especially in Financials today , no conviction from either side, winners ‘momo’s’ lagging, sluggish eco’ data swept under the rug again and SPX 1260 acting as “R” for a week now.
The heavy action was in the “rare” stuff holiday trade as MCP/REE/AVL ballooned in the morning before ugly reversals giving a glimpse of the ‘selling off’ noted as MCP ($55 to 47) lock up period looms. We’ll probably not see these highs again for some time.
Starting to think the way to derail this rally and correct is a ‘good news’ rally and sell off day like in the ‘rare’ stuff today. In this scenario, the market rallies off a good catalyst, but it becomes evident there is no conviction force behind it and the rally peters out. Something to watch for later.