The headlines earlier this morning were that officials in Greece had failed again in all-night attempts to reach a deal to end the Greek debt crisis. But an hour ago came the report, since confirmed, that an acceptable agreement was indeed hammered out and approved by the Greek parliament.
Wouldn't you expect that after all this time, and after all those failed meetings and disappointments, that the stock market would explode to the upside if a deal was ever reached?
Or by rallying so strongly since October were markets saying they knew there would eventually be an agreement, and so have it already factored into prices.
The initial reaction by the market so far, a big yawn, seems to indicate it may be the latter situation. Pre-open futures were fractionally negative prior to the report, and an hour after the report have become only fractionally positive.
And that in spite of another positive economic report in the jobs picture, with new unemployment claims declining by 15,000 to 358,000 last week. That was considerably better than the consensus forecasts for 370,000 claims. And the four-week m.a. declined to 366,250.
It does have the talking heads on financial TV hammering at each other with opposing opinions about the situation in the Eurozone again.
Steady Trend Has Calmed Volatility.
Short-term traders have been finding less reason to settle for quick trades in the steady up-trend since mid-December.
The lack of volatility can be seen in this daily bar chart, which rather than just showing the close each day, shows the volatility between each day's high and low.
The only triple-digit days experienced by the Dow were the first trading day of January, when it closed up 179 points, and the 2nd trading day of February when it closed up 156 points. Otherwise, no volatility, even intraday. The calm before a storm?
Probably as a result of the lack of trading opportunities for short-term traders in the lack of volatility, U.S. trading volume has fallen significantly, with the average trading volume on all exchanges only 6.9 billion shares daily in January. That's the lowest in a January since 2005, and well below the 9.4 billion average in January 2009, when the market was in the midst of its final leg down to the early March low of the 2007-2009 bear market.
Oh, Oh. Dr. Doom has turned bullish?
There's an old saying that a bull market doesn't end until the last bear has capitulated.
Nouriel Roubini, known as Dr. Doom for his long-time bearish doom and gloom outlook, has apparently turned bullish.
Roubini's director of allocation strategy said on CNBC, "We're a believer. We're celebrating. We think the rally has legs."
In fairness, she did not say the Roubini firm has become a raging long-term bull, as in a reversal from Dr. Doom to Dr. FeelGood, but only that it is positive on the market for the next few months, while expecting real trouble has been delayed to the 2nd half of the year.
No Matter Who You Vote For . . .
Over the years I occasionally get myself in trouble criticizing or praising government actions. If the Democrats happen to be in office at the time and I'm criticizing, I catch it from readers of a Republican persuasion, with accusations of my 'obvious' far left leanings. If the Republicans happen to be in office at the time I catch it from readers of a Democrat persuasion, with accusations of my ‘obvious' far right leanings.
The truth is that my analysis and comments are based on economic or market ramifications of whatever government action I'm looking at, and is not biased in either direction by consideration of which party is in office at the time.
In his current issue, Joe Shaefer, editor of Investor's Edge, provided the best description of my attitude toward politics I've seen.
He quoted the lyrics of an obscure song (by Neil Innes and Vivian Stanshall) that says it all:
"No matter who you vote for, the government always gets in!" Perfectly said.