As we drift lower midday, there is good news and bad news.
The bad news:
1) we are entering a period of poor economic data, even poorer than the previous months, as evidenced by the retail sales data today;
2) traders believe that the most likely course of action the next few months is a trading range, with days of high volatility and large price swings followed by days of relatively little activity; we will test our Friday lows several times.
The good news:
--many stock prices have been cut in half in the last 5 months, so stocks are already pricing in a relatively large economic slowdown.
In fact, even today many big names are sitting at 52-week lows: retailers like JC Penneyand Nordstrom, commodity stocks like US Steel, industrials like Eaton, and some techs like Texas Instruments.
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