Stocks are holding up well today...financials are down but off their lows...major indices down 1-1.4 percent, but also off their lows....is this a surprise?
It is, given the volume of bad news: December durable good well below expectations, with big downward revisions in November...December new home sales cratering, with big downward revisions in November....and awful guidance or reports from Black and Decker , Oshkosh , Illinois Tool Works , Allstate , and others.
Well, isn't this all priced in? No. Not when November durable goods goes from down 1 percent to down 3.7 percent...not when Black and Decker gives guidance of $0.05 to $0.15, with analyst estimates at $0.74.
The hope, of course is that the stimulus bill, the bad bank plan, and the Fed buying more of everything will be the X-factor that stabilizes stocks.
This may well happen, but every time I bring it up a chorus of bearish traders shoot me nasty emails: after the stimulus/bad bank stuff wears off and it proves insufficient...we are in for a February - March selloff that will take us below the November lows.
So the bears shout at me.
That's a long way from here: 7449 was the intraday low for the Dow on November 21, 800 points below where we are right now.
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