It's been a rough start so far this year, which got even rougher yesterday, when the market took its cue from the news and from the retail sector. This news dovetailed perfectly with the flaccid jobs report. It's clear the market will not suffer losers gladly, as any company posting disappointing earnings results and/or guidance can expect their underlying shares to take a serious drubbing. But, what of the broader market, as the bias shifts to the downside? A ten percent correction from the all-time high would mean the Dow pulls back to 14,930.
I don't see that happening, but a pullback to the 50-day moving average (exponential) would land the index at 16,050- a good place for the market to take a stand.
In recent years, the economy has shown promise early only to see it fizzle out as the weather got warmer. Many thought that would be the challenge for the Fed; but what if the economy cuts to the chase early, stumblingly out of the gate and staying unimpressive? Momentum looked solid and while there is general consensus, December's jobs numbers are revised much higher, and now all of a sudden the economy is a question mark- again. For now, the Fed will stick to its tepid tapering, hoping the economy actually justifies their retreat. (Of course, there shouldn't have been any accommodation in the first place, but that wine is firmly bottled for now.)
Small Promises Still to be Broken
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