Daily Market Update – November 12, 2014 (8:00 AM)

It’s now Wednesday, generally the quietest day of the week, right in the middle of what was expected to be a quiet week.

With Singles Day and Veterans Day now over, the most interesting thing this week may turn out to be today’s planned space landing on a moving comet.

How that figures into anything is debatable, but at least it’s interesting and really the stuff of science fiction.

While that’s going on the market seems as if it prepared to open weaker than the past two days, but still not with very much conviction.

While there are still some earnings reports to go, for the most part that has now been removed as an overall market catalyst, although individual stocks can obviously still have their significant ups and downs, although the prevalent significant movement, when it occurs, has been lower.

Those whose every breath is fully invested in the market know very well that November and December tend to be good months, regardless of how the holiday retailing season stacks up. While patterns tend to break down as they become more widely recognized, especially when everyone talks about it, such as with the “January Effect,” the November – December effect isn’t one that’s too widely discussed and there’s still plenty of reason to believe that there’s hedge fund fuel to keep that pattern alive for another year.

One thing that could definitely help the overall market to move higher would be some good numbers coming from the retailers that are just now gearing up to report their earnings. More importantly, their forward guidance can really be the catalyst that seems to be missing right now.

Those good numbers and good forward prospects have to come from more than the higher end retailers, though. That segment of society has noticeably increased discretionary spending, but in the really big picture they represent a very small portion of what really matters. Even Macys isn’t entirely reflective of an improving retail picture if it reports good earnings. The improved results really have to be seen from the bottom up, including dollar stores, Wal-Mart, specialty retailers and big box stores throughout the spectrum.

I hope that turns out to be the case, as it also will get the albatross around our necks to be released. That is the fear of when interest rate increases will finally happen. A heating up economy, especially in those phases that necessitate an increase in interest rates tends to be good for everyone and would finally get us over the fear of those hikes, just as the eventual announcement of a taper finally got us over the anticipation of that announcement.

For the next few days I doubt that I’ll be adding any new positions. With a couple of DOH Trades set to expire this week,  I would like to see them either expire or will have a need to roll them over, hopefully into a marketplace that has more willing sellers than has recently been the case.

That lack of a willing market of sellers may continue to
add to the difficulty of executing rollover trades at fair prices, but I expect that when hedge funds get back into the practice of hedging that will no longer be the case.