Daily Market Update – February 17, 2016 (7:30 AM)
What was good about yesterday was much more than the fact that the market climbed more than 200 points.
What was also good was that the climb higher was also a broad one, but even that wasn’t what was really good about yesterday.
What was really good was that the market, which may have been buoyed by early reports of an OPEC agreement to cut oil production, didn’t fall apart when the realization came that the agreement was complete rubbish.
Instead of following oil much lower when traders began to come to their senses that a production cut was going to be impossible, the market briefly reduced some of its gains, but never made an assault on the flat line.
Instead, it went higher and higher and finished the day nicely.
The bad part is that if the market realizes that its estrangement from oil price is a good thing, it may start to act properly if oil does start a sustained move higher.
At some point oil will have to do that and at some point the market will have to react in kind.
The problem becomes whether or not the market will come to that realization too soon and be unable to recoup its losses as it foolishly followed oil lower.
As with many things, we’ll see.
This morning, the futures are again pointing higher, even though there is really nothing very different about the world this morning.
In a rear view mirror the past days do look pretty good, but it’s hard to see whether there is anything up ahead that can convince the market that it’s time to approach the December 2015 recovery highs or maybe even beyond.
As is usually the case, it’s easy to get taken in when you see some of those syrong moves higher as was the case yesterday and last Friday. However, 2016 has been filled with days like those and they only led to disappointment.
This time may be different, but for now, I’d be happy just to get a trade or two in for the week or maybe just an assignment.
For now, those aren’t overly lofty aspirations, but it would be nice to finally see 2016 get on track.