Imagine being handed a 5,600-page proposal and told you have to vote on its passing in just a few hours.
Well, welcome to Washington.
No, speed reading is not a requisite to public office. And, no, those who voted on the stimulus bill did not remotely know all that it contains.Yes, each member of Congress was requiring something specific, specifically beneficial to them or their constituents -- something the document's authors knew had to be included to garner their yes vote. And, yes, such special items (affectionately known as "pork") are legion in the stimulus plan. I mean, no way no how, do we need 5,600 pages to pass a $600/individual stimulus check, extended unemployment and aid to small businesses...
It's that wonderful time of the year where trading becomes so thin that special things tend to happen in the stock market. One technical trader whose work I respect has already closed up shop for the year; as this is the time of year where his charts are most prone to fail him...
I.e., with many traders on holiday, volume is light and, therefore, pricing and breadth can get really whacky.
Yesterday's breadth was a case in point: While the Dow went from down 400 points all the way back to flat to close the day, the S&P 500 Equal Weight Index (all positions evenly divided) closed down 1.14%.
This morning, as I type, the Dow's down 95 points (0.30%), while the S&P 500's flat (+0.03), the Nasdaq's up 0.58% and the Russell 2000 is up 0.75%.
The S&P 500 Equal Weight (a decent measure of breadth) is down another 0.33%.
Lastly, with regard to breadth, note that the S&P 500 Index (it's capitalization weighted) is flat on the morning, while presently 350 of its 504 members are in the red.
The VIX (SP500 implied volatility) is down 4.45%. VXN (Nasdaq i.v.) is up 0.21%.
Oil futures are down 1.23%, gold's down 0.11%, silver's down 1.72%, copper futures are down 1.43% and the ag complex is down 0.19%.
The 10-year treasury is up (yield is down) and, yes, you guessed it (looking at commodities) the dollar's up 0.40%.
Our core portfolio -- off 0.25% to start the day -- is seeing 5 of its components (tech, oil service companies, banks, utilities and Eurozone equities) in the green. While base metals, silver, Verizon, consumer staples and Asia-Pac stocks lead the rest of the pack lower.
Oh, almost forgot: All but 3 of the Asian markets we track closed lower overnight. While Europe's following through to the downside (despite our ETF being up 0.10%) after yesterday's walloping; all but 1 of the 19 bourses we follow are in the red so far this morning.
Today, more than ever, it is critically important for the investor to understand this utterly timeless 135 year-old quote:
“In a crowd every sentiment and act is contagious, and contagious to such a degree that an individual readily sacrifices his personal interest to the collective interest. This is an aptitude very contrary to his nature, and of which a man is scarcely capable, except when he makes part of a crowd.”Have a nice day!