The market is currently performing a balancing act on a wire of roughly 1317.00. Said another way, the market is consolidating with a mean of roughly 1317.00. Every time the market rallies, it reverses down, then reverses up, then reverses down again, thus the balancing act. The market will not consolidate forever so one must watch closely for signs of a range extension.
Since the market makes the news, one might wonder which news made the headlines today.
For starters, oil was up again closing another $1.05 higher on the day. MarketWatch said, Concerns remained over supply as opposition forces and soldiers loyal to Libyan leader Col. Moammar Gadhafi clashed near some of the country’s key energy installations. With no end in sight for the conflict, the oil market began to price in a much longer interruption to Libya’s production of 1.6 million barrels a day.
“What people are beginning to focus on with oil is the economic weakness that could come from a sustained rise in oil prices,” said Brian Lazorishak, portfolio manager and quantitative analyst at Chase Investment Counsel. “It’s obviously a drag on consumer spending, it can be a drag on economic growth, and everybody feels like, while the economy is showing some good signs of a recovery, it’s kind of a fragile recovery.”
Another wrinkle in the market was that Wells Fargo & Co. cut its view of the semiconductor sector to “market weight” from “overweight” for the first time in more than two years, thus slamming the Nasdaq.
The final major pressure on the markets came from Europe. As I keep writing, the European banking problems are far from over. Greek debt was downgraded again to speculative grade (read: pure junk). The Greek CDS market hit an all time wide spread bringing it closer to bankruptcy. Oh, and Portuguese bond yields hit a new never-before-seen high.
Yup, problems everywhere but don’t worry, Zimbabwe-Ben at the Federal Reserve Bank will heal all that ails ya.
Since the market makes the news, one might wonder which news made the headlines today.
For starters, oil was up again closing another $1.05 higher on the day. MarketWatch said, Concerns remained over supply as opposition forces and soldiers loyal to Libyan leader Col. Moammar Gadhafi clashed near some of the country’s key energy installations. With no end in sight for the conflict, the oil market began to price in a much longer interruption to Libya’s production of 1.6 million barrels a day.
“What people are beginning to focus on with oil is the economic weakness that could come from a sustained rise in oil prices,” said Brian Lazorishak, portfolio manager and quantitative analyst at Chase Investment Counsel. “It’s obviously a drag on consumer spending, it can be a drag on economic growth, and everybody feels like, while the economy is showing some good signs of a recovery, it’s kind of a fragile recovery.”
Another wrinkle in the market was that Wells Fargo & Co. cut its view of the semiconductor sector to “market weight” from “overweight” for the first time in more than two years, thus slamming the Nasdaq.
The final major pressure on the markets came from Europe. As I keep writing, the European banking problems are far from over. Greek debt was downgraded again to speculative grade (read: pure junk). The Greek CDS market hit an all time wide spread bringing it closer to bankruptcy. Oh, and Portuguese bond yields hit a new never-before-seen high.
Yup, problems everywhere but don’t worry, Zimbabwe-Ben at the Federal Reserve Bank will heal all that ails ya.
Trade Date: 3/7/11
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