Daily Market Update -January 7, 2015 (7:30 AM)

Looking at the futures this morning in yet another free fall, this may be the worst start to a new year that I can recall.

I’m certain that if someone hasn’t already looked back at the data, they will do so by the end of the week.

With China down another 7% overnight and closing the market after just 29 minutes of trading and oil futures plummeting some more this morning, as well, it’s a double hit on our market, as the S&P futures are down more than 2% and just adding to their abysmal state for the week.

To add to worries, there’s now second guessing about the FOMC’s decision to increase interest rates and what could they possibly do in the event of a sudden turn down in the US, at this point.

There’s not too much doubt that some serious economic expansion would have been necessary to give the FOMC the chance to reload its tools and keep their inventory at high enough levels to use, if needed.

It’s not necessarily a good idea to project a crisis on the basis of just a few days of trading, but the situation in China was bound to happen, as the strict restrictions they put on trading was coming to its end and you can bottle up and contain things for only so long.

When China went through its market crisis back in July and August of 2015, we definitely felt it here and finally went into our own first real correction in more than 3 years.

With China again seeming to be in a position to wag the US, we may be held hostage to some degree by what policy decisions they may make.

Just like the FOMC, they may be running out of tools on their side of the Pacific, as well.

At this point we are probably going to be wondering what the Chinese government will do next and how much it may attempt to actually throttle free markets.

While prices are looking better and better, there hasn’t been too much of a rush to pick up seeming bargains. The buying seen during the final hour of trading on Monday and Wednesday may have been very poorly timed, so it’s not too likely that there will be eager people looking to commit to what they think is a bargain, only to find it much more of one the following day.

That includes me.

While I like to buy on market weakness, I’ve had a somewhat uneasy feeling for about a month and haven’t jumped in at some signs of early in the week weakness as often as I might have previously.

For now, there has to be some evidence of stability creeping in and some demonstration that perhaps a bottom has been made.

With what may be another big drop in the DJIA and S&P 500 the chartists will be furiously looking for where the next level of support may be, as one after another gets obliterated.

I’m just going to stay tuned for now.