Which is it? What does Mr. Market prefer.? No sooner am I done putting together a thesis about tomorrow-- that retail sales will be weak, that Mr. market will bring back the harsher language on housing today from the fed and add one and one together and convince itself that rates are soon to go lower and we rally hard-- than GE comes out with a glowing preview of the economy. What then if retail sales are strong? That coupled with GE does the market like that too? I think so.
Well folks we have our answer! It's FAST. Recent mortgage applications and a better than I expected retail sales report coupled with yesterdays language change by the fed regarding the strength of the economy... has led traders to the proper conclusion that things are ok and that we shouldn't expect a rate CUT any time soon. Considering those assumptions the market is really doing quite well today. The remaining push and pull is between semi conductor negativity- bad pricing coupled with over supply and downgrades and the rest of the market ready to roar. So while we stand still the SOX has pulled back a full 4%, the market is doing the internal cycling necessary at this point. What will be the spark that sets off Santa's rally? I think it will be Paulson's trip to China.