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Markets Are Doing Fine

Stop me if you've heard this: You can say today is "risk off" or "risk on" but the simple fact is the stock market is still being driven by risk on/risk off in general.

Today (Thursday), stocks rallied as the dollar reversed its recent gains; commodities and commodity stocks have come off their lows.

Bulls have argued the selloff has been for non-fundamental reasons — that this is an unwind of commodities by big macro funds.

Wait, isn't there concern over slowing growth, and isn't that a fundamental concern? Yes, but don't kid yourself: crude doesn't trade in a $12 range in 2 days on fundamentals, silver doesn't trade in a 35 percent range in a week on fundamentals.

That is an unwind. And I don't believe that a commodity selloff will be disastrous for growth; quite the opposite.

Fact is, I have been hearing about a massive correction coming for 3 months. The S&P 500is a little more than 1 percent from a new high. And despite concerns that consumers are slowing down, they sure haven't stopped shopping. Macy's and Kohls reported good numbers (Macy's better than Kohls), and the S&P Retail Index is set to close at an historic high.

A correction? Maybe, but the VIX remains near its lows, volumes remain anemic, and the overall market is doing just fine.

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