What can we conclude about today's trading? That we are not going to move too far too fast--and the most likely path is a trading range with a test of the lows.
Yes, Virginia, earnings matter. The focus has been on the credit & macro backdrop; this has obscured fundamentals. The problem now is that it is difficult to say what is priced in.
Techs led the markets down. Intel is reporting after the bell. As a trader, is Intel fairly priced? They used to have all sorts of opinions, because they had models. But when Intel moves from $25 to $15 in two months, all anyone can says is, "I don't know, Bob, I just don't know."
Commodity stocks were also notably weak today.
Meantime, TrimTabs is reporting equity mutual fund investors redeemed $8.8 billioni on Friday. Bond funds had a record $10.2 b one-day outflow on Friday as well. Equity fund outflows for the month of October are now estimated at $55.8 b, which would be the largest outflow since ICI began records in 1984.
Remember: investors often panic at extremes.
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