In the MORNING COFFEE REPORT yesterday, I stated the mood should be “melancholy”. After a long week of running higher, with an explosive jump through 3500, I felt the bull was still in place but had to play with 3500.
I am not a smart man. I still don't know at what age is it appropriate to tell my dog that he's adopted. I do know, however, that after 200 SPX points in a week, the market needs a breather – especially around big numbers.
I was NOT expecting a move of -47 points on the SPX on the open. The reason the media gave was “losing optimism that a stimulus deal would be done by the election”. That is NOTHING NEW. We have been hearing that throughout the run higher, and ignoring it.
After the initial shock on the open, the day was quiet and a little boring/depressing. Maybe even a little melancholy, but slightly different than the slow decline I was expecting.
Goldman came out in the morning and downgraded tech companies, probably because they were short them and needing to buy them back. Also, there was growing concern that a second wave of Corona would was coming as cases in Europe were climbing – whatever that means? It was reported that cases in Italy shot up 20%.
If 5 people have Ebola and a 6th gets it, that is a 20% increase, but nothing to alarm anyone. The markets caught on by the end of the day. In the last 30 minutes, the Minis and cash pierced the “unchanged line” to go in the green before last minute sellers came in. The opening was anticlimactic to the close with the Dow being down -19.80 points.