The market is slightly higher in early trading, but not by much. Overseas market action was mixed, with Asian markets mixed and Europe mostly lower this morning.
In the US, we did get some strong economic reports. The ADP Employment report was by far the strongest, showing a gain of 297,000 jobs in December, almost 3x what was expected. And the December ISM Services index came in above expectations at 57.1.
The strong economic data stoked buying in the dollar, which is weighing on commodities. Oil prices are lower to $88.50, and gold prices are off again near $1370.
The 10-year yield is also up sharply on the strong economic data, with yields on the 10-yr. rising 10 bps to 3.45%. The volatility index (VIX) is barely changed near 17.40.
Trading comment: Yesterday's selloff looked like it was going to have some teeth to it, but once again the market rallied at the end of the day so that the close was little changed from the previous day. Oil and gold prices have started to rollover, and real estate (IYR) was down sharply yesterday also. That increases the chances that equities follow suit, and continue to pullback.
As such, I want to be selective with my buying, and not get sucked into a potential January headfake. I think there is a better buying opportunity on a further pullback for those who can be patient.
long VIX
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