Oct 16th 2014 – Dow off for 6th day in a row

fear-is-not-real

Market View:

I really liked that movie, “After Earth”.  The quote above sums up how I am thinking having just re-entered the market.  Having sat out in cash as the market corrected about 10% across all the indexes, I admit some trepidation (I would not be human if I didn’t) having been filled on a few orders today.  But as the quote says, fear is a choice and I choose to trust my system…fear be damned!

Historically at least, after so much selling we are due a decent relief rally.  The S&P 500 put in a double bottom shortly before the market open in the futures before rebounding right off the mark to close marginally higher.  It was an impressive feat similar to the massive comeback yesterday.

Therefore technically, I have not changed my opinion that this is at least a short term bottom here and we will be back above 1900 by early next week.  It is only a matter of time before greed takes the place of fear.

Market News:

U.S. stocks ended little changed on Thursday, with the Dow industrials recouping much of a 206-point deficit, as investors balanced worries about global growth against mostly better-than-expected U.S. earnings and economic reports.

For every share falling more than two gained on the New York Stock Exchange, where nearly 1.1 billion shares traded. Composite volume cleared 5 billion.

Apple fell after the supplier of consumer technology showed off its latest iPads and said it would launch a wireless payment system on Monday.

Upbeat data on the U.S. labor market did little to nothing to curb selling in the early going, with the same true of earnings from companies including Netflix and Goldman Sachs Group.

The government said its count of Americans filing claims for jobless benefits dropped to a 14-year low last week, falling by 23,000 to 264,000, its lowest since 2000.

Separately, U.S. industrial production rose 1.0 percent in September, versus expectations of 0.4 percent.

Less positive was a u-turn in confidence among home builders in October, falling sharply after rising to a nine-year high the prior month.

Stocks recovered much of their drop after St. Louis Federal Reserve Bank President James Bullard told Bloomberg News that the Federal Reserve should consider postponing the end of its bond purchase program to stop the drop in inflation expectations.

Friday:

Earnings: General Electric, Morgan Stanley

8:30 a.m.: Housing starts for September

9:55 a.m.: Consumer sentiment for October

News Sources:  CNN Money & CNBC

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