This is one crummy, unenthusiastic rally. We should have done better today.
1) Draghi implies more stimulus coming, and they sell into it. ECB ChiefMario Draghisaid downside risks had increased, and strongly implied more stimulus was coming. This was applauded initially, with both Europe and U.S. futures rallying. It was an echo of Bertrand Russell’s famous line: “When the facts change, I change my mind.”
It was widely believed that some of these comments were directed at the Federal Reserve, a veiled request for them to back off on the perception that they are on an aggressive path to hike rates.
What happened? Our markets open up, and they immediately sell into it.
2) a huge oil rally, and they sell into that. The only thing that saved us from a humiliating plunge was oil, which staged a dramatic turnaround shortly after the U.S. open and took the whole market up with it.
But — and here’s the worrisome part — the second oil stopped rallying at noon the market stopped going up and began gently rolling over.
And for the rest of the afternoon, it’s meandered around in a very narrow range.
Volume is heavy but much lighter than yesterday. There were only two stocks advancing for every one declining.
That’s it? After yesterday, when we had 30 stocks DECLINING for every one advancing?
After 40 percent of the stocks listed on the NYSE were at 52-week lows, and after one of the worst Januarys EVER, this is all we can do?
This is one tough, nasty, skeptical market