More weak economic news drove the stock market down another 400+ points today, as stocks have now lost almost 1,000 points in two days. The culprit today was weak retail data out of the nation’s big retails, some posting double digit losses in same store sales for October. Furthermore, the Big 3 automakers are seeking more handouts from the Federal Government. Traders suspect that if Congress bails out the automakers, companies from other industries may try to get their hands in the cookie jar as well. This will result in a massive Federal Deficit, and little room for the income Obama administration to maneuver through this economic minefield.
On the bright side, the Oil complex continues its slide, nearly breaking through the $60 level to the downside. Oh, how times have changed since the days of $150 dollar per barrel just a few months ago. Remember this…a trend in motion tends to stay in motion! The trend to the upside was far more choppy than this downtrend. This downtrend is more dangerous as it has not allowed traders many opportunities to enter short positions on pullbacks. Watch for continued low prices on weak economic data.
The other big news of the day was that the Bank of England cut interest rates by 150 basis points, an unprecendented move. The European Central Bank cut rates by 50 basis points. Initially, this was welcome news prior to the U.S. stock market open. But, the weak economic data immediately put a damper on that. The Dollar ended the day a little stronger against the major currencies and interest rates were relatively unchanged. Commodity prices, again, lead by the energies, were generally lower again today.
In regard to tomorrow’s trading, watch for a volatile reaction to the jobs report. The general consensus calls for job losses of 150 to 175K.
Scott Cole
www.bestdaytradingstocks.com
www.kungfutrader.com
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