A Disheartening Loss
No, I'm not talking about the big up open we had this morning that is fading, nor am I talking about yesterday's market declines. I am referring to the Fiesta Bowl last night, where Ohio State came back from being down 17-6 going into the fourth quarter, only to lose in the closing seconds. Great game...tough loss.
Getting back to the markets, stocks opened sharply higher but quickly gave up most of their gains. The market is pretty overbought here, so it might be difficult to make much headway in the near-term. Also, sentiment has become pretty bullish, which also acts as a headwind.
In economic news:
- The December ISM Services Index came in better-than-expected at 40.6 (up from 37.3)
- November factory orders fell -4.6% (after falling -6.0% in October)
- November home sales were down -4.0% (vs. -1.0% consensus)
In corporate news:
- Mosaic (MOS) reported better-than-expected earnings, but said the supply chain is pretty full right now (the stock is down -3.3%)
- Toyota (TM) said it will halt production at all of its Japanese plants for 11 days in Feb and March, after December sales dropped -37%
The dollar is higher again vs. the Yen and Euro; gold and precious metals are lower; oil is trading marginally higher; the 10-year yield is higher again, up to 2.54%; and the VIX is lower to 38.80.
Trading comment: I haven't put more cash to work, as the market is in overbought territory and sentiment is too bullish in the short-term. The 10-day CBOE put/call ratio and the ISEE call/put both hit levels last week that we have not seen since October 2007. Obviously, that was not a good time to be buying.
So I want to see if the market pulls back, or maybe it just trades sideways while it works off this overbought condition. Either way, I am holding off on new buys right here.