The market is trading higher in early trading, the same pattern for the last few days. But on Monday and Tuesday, those higher opens were sold into and the market gave back most of the gains by the close. We will have to see if that pattern shows up again today or not. Most of the time, when the market opens strong and closes weak it is a sign of selling pressure that soon knocks the market lower, but this has not been the case yet.
In economic news, the CPI for November rose just 0.1%; the NY Empire Manufacturing index rose to 10.6 in November (vs. 3.0 consensus); and the NAHB Housing Index showed a reading of 16 (basically in-line with consensus of 17).
The euro is lower today after Moody's put Spain on review for a possible downgrade. Also, Portugal held a 3-month bill auction that showed weak demand. The lower euro is boosting the dollar, which is in turn weighing on commodities. Oil prices are down near $87.85, while gold prices are lower to $1390.
Asian markets were hit overnight after the Japan's Tankan survey showed a drop in confidence among large manufacturers for the first time in nearly two years.
The 10-year yield is down a little to 3.41% after another big spike higher yesterday. The sharp rise in yields yesterday may have exacerbated the selloff in growth stocks, so that bears watching.
As for the volatility index (VIX), it is still at low levels of 17.52.
Trading comment: Yesterday's sharp selloff in many leading growth stocks could be a warning signal that the complacency I have been writing about lately is coming home to roost, or it could just be another one-day wonder of profit taking. At this point, it's too early to tell. So I will continue to watch the growth leaders to see how they bounce back. If they continue along their uptrends, then the market should be okay. But if they begin to break their 50-day averages, etc, then that would be a signal to get more defensive. As for me, I took some profits yesterday, just to be cautious.
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