Thursday, January 03, 2008
Stocks Mostly Lower into Final Hour on Rising Anxiety Ahead of Tomorrow's Jobs Report
Posted by Gary .....at 3:43 PM
BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Semi longs, Biotech longs and Medical longs. I have not traded today, thus leaving the Portfolio 75% net long. The overall tone of the market is negative today as the advance/decline line is lower, sector performance is mostly negative and volume is about average. Investor anxiety is high again. Today’s overall market action is mildly bearish. The total put/call hit a high 1.24 again this morning and the ISE Sentiment Index hit a depressed 82.0. For the sixth day in a row, the NYSE Arms is high, hitting an elevated 1.77. Fed funds futures now imply a 24.1% chance for a 50 basis point rate cut at the upcoming Fed meeting, up from a 7.8% chance last week. Trading has a very sloppy/choppy feel to it today. Retail stocks are under significant pressure, which is weighing on the broad market. It looks to me like there is a lot of beginning of the year profit-taking still going on in last year’s winners. As well, it seems new shorts are being placed on last year’s already heavily shorted losers. I still see few signs that large buyers are stepping up. I suspect we will see large buyers finally emerge next week. I expect
stocks to trade mixed into the close from current levels as more economic pessimism, increased shorting and rising anxiety ahead of tomorrow’s jobs report offsets bargain hunting, lower energy prices and seasonal strength.