Daily Market Update – July 9, 2015 (8:00 AM)
Remember that 300 point turnaround on Tuesday?
It was pretty much a forgotten thing after yesterday’s 250 point loss.
As if that wasn’t enough to eclipse the memory of the turnaround, the shutdown in trading at the NYSE for almost 4 hours will be talked about for a long time. Triple digit gains, losses and turarounds come and go, but these kind of trading halts all have a life of their own and persist for archivists and novice historians alike.
You may be able to add yesterday to the White Bronco chase and other events over the years that somehow leave an indelible mark on memories.
With the issues at United Airlines yesterday and reports of the Wall Street Journal’s web site being down, had to set off alarms even in non-conspiracy oriented people. Coincidences occur all the time, but it’s hard to totally dismiss the idea that concerted efforts could be behind a string of unexpected software crashes.
This morning it appears as if coincidence is the diagnosis and we move on. What was shown, for those who may be plotting to crash the NYSE system is like a heart attack patient who is fortunate enough to have had or to develop good collateral circulation, helping to keep vital tissue perfused and alive. In this case it’s the existence of multiple other exchanges that created collateral circluation and kept the enterprise going, even as the NYSE was out for the count.
To the market’s credit, in the face of a large decline already in the making because of the Chinese drag, the market didn’t add on in any palpable way to that loss and create an avalanche of selling.
Today is a new day and we’re back to the reality that lately, it has been a case of 4 steps back and 3 steps forward. This morning’s futures looks as if it is trying to play a game of catch-up and add another one of those forward steps top the mix.
While last week the real news was Greece, this week it is clearly all about China.
Yesterday’s market followed a plunge in China as their feeble attempts at manipulating markets by suppressing them failed to impress anyone, nor to solve the underlying problem of widespread use of leverage and a building bubble.
This morning we woke up to the market in China having moved about 6% higher.
The least we could do woith that kind of a move is to give it a nod and maybe consider taking that step forward.
With yesterday’s decline the S&P 500 was about 4.5% off its last high point. That puts it right in the mini-correction neighborhood.
But where the real test may be is that the S&P 500 ended the day yesterday within a breath of its support level. A simple additional 20 point drop in the DJIA could have been enough to get technicians really concerned or could have triggered algorithmic programs, most likely with sell orders.
So the rebound in Shanghai comes at a good time.
Maybe the ensuing rally here in the states may be enough, if it can continue, to put what few positions are set to expire this week and the next week into contention for either rollover or assignment and maybe get things back on track.