Yesterday was wax off because as the media rationalized, some Jawbone was talking tough on interest rates (as in a September hike is on). Today wax is on because well, some economic data came in soft.
‘Yey! Let’s buy the stock market because a soft ripple came in and the Jawbone yesterday didn’t mean anything!’ Well, the airheads are right about that, it didn’t mean anything. Neither did today’s economic data, which included said soft data (ADP Employment) and some firm data (ISM non-manufacturing AKA services, which are running the show right now).
Meanwhile, here is the SPX, doing nothing on the short-term other than grinding everybody up.
Here is SPX on the long-term, looking like a bloated hog in need of a drop to at least the monthly EMA 20 (currently 1980).
Of course, the market could confound bears, increasingly cautious to bearish chartists, economic data parsers, macro market indicator twittlers and everyone else thinking about a correction to come. But as this picture presents itself, it remains ripe for a correction.
The point of the post however, is that all this wax on, wax off stuff coming out of Policy Central and the mainstream media is not only annoying and a distraction, it can be dangerous. The only ones buying this morning’s hype were day traders, crack abusers and pre-programmed black boxes. Nothing is resolved (ref. daily chart above) and until it is, the big picture view leans toward risk.
Personally, I had to admit that I am not capable of trading this backdrop and am happily in rehab, awaiting directions, whether they point north or south.
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