Seasonal Influences Abating

We have seen a number of seasonal influences in recent days, which should start to abate now. On the negative side we have had selling of winners, likely a result of investors delaying capital gains until 2011 and the undoing of year end markups. On the positive side we have had beginning of the year inflows. As these factors abate we should find out which way this market is headed.

The S&P futures were selling off hard overnight but have pared the losses on a very positive ADP employment report. The report is clearly a surprise as treasuries are selling off. However, I would note that markets generally top out on good news, not bad.

1 comment:

Onlooker said...

The long bond got HAMMERED on that jobs report. Yikes!

At some point those rising rates will be a negative for the market. Especially in this overbullish sentiment environment, as Hussman often points out.

It will be telling how the market opens up in the wake of that jobs report. Lately the reactions to good news have been more and more muted. And it would be classic to get a correction, finally, on a good news point like this. But maybe it won't happen until Friday.

I can hear the confusion amongst the talking heads already as they try to figure out why the market's going down with all the good news about. LOL