Written by Rick Ackerman, Rick’s Picks
Updated 11 pm 14 December: It looks like Santa is very close to being stuck. After Friday’s rout, the Dow is only about 200 points above the December 10 intraday low.
The Street is Oblivious to a Darkening Reality
The stock market kept its cool Thursday, demonstrating yet again that traders are deaf, dumb and blind to whatever is going on in the real world. The Dow rose moderately even though the headlines were a full shade darker than usual.
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Trump was threatening to punish GM for closing an auto plant in Ohio. (He could kill two birds with one stone if he waits for his nemesis Musk to take over the company.) The Saudis were planning a sharp cut in oil exports in order to drive up prices; the U.S. budget deficit hit a record in November; and Pimco raised the odds of a recession over the next 12 months to 30%, a nine-year high.
Despite the menacing tone of the news, the Industrial Average eked out a 70-point gain while the S&Ps fell slightly.
Let’s hope retailers don’t chime in with a dour yuletide report or we’re liable to see a Santa rally in reverse.
Seasonality is strongly in bulls’ favor, but if DaBoyz are unable to seize the advantage on Friday to end this unusually turgid week, Wall Street will face a ponderous overhang of supply come Monday. And that might be just too much to squeeze into the chimney.
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