Rumors and visuals
Ohhhhhh babbbyy - can't you just feel the tension ahead of Intel's (INTC) earnings report due out after the close? Actually, maybe that is the tension I normally feel right before doing a 3-day guest host gig on CNNfn from 9:30-11:30am with the lovely Rhonda Schaffler. Daisy who?!
On a serious note, this morning I talked about the near-term trading range that the VIX and 10-year note yield are in. I wanted you to see (thanks Casey) what they actually look like.
Exhibit 1 - Volatility is even in a range
Exhibit 2 - As is the 10-year Note yield
On the geo-political front, I was speaking to an account today about the prospects of Iraq's leader seeking asylum. While anything is possible, it is highly unlikely. It makes more sense that the Iraqi leader would fess up to any violations before he would put aside all that he has built for himself. Is there any precedent for this - Quadafi during the Reagan Administration. Yeah, the same Libyan leader that is now our friend.
There was a little jig in the tape because of the rumor, just like there was a little spanking of the tape on the rumor that UN inspectors were being sent out of Iraq earlier in the day. The bottom line is that there is zero conviction on either side until the market breaks out of its current range. I would use SPX 870-945 as the current trading range. News may move it slightly, but it is unlikely to convince anyone.
On the earnings front...INTC reports tonight as everyone including those living in a cave know. I also doubt there will be a market reaction (baring any totally outlandish guidance one way or another) to the news that will drive the whole market out of the trading range because there hasn't been a huge move either way going into the news. If INTC was up huge in the weeks ahead of the news, there would be clear "sell on the news" potential. If INTC was down huge in the weeks ahead of the news, the market would be set up for "it can't get any worse" bounce back potential. Either one could still happen, but probably won't be significant enough to move the market out of the range because there wasn't enough emotion going into the news item. In other words, not enough "trapped" shorts or long that need to flatten out quickly causing a sustainable reaction in either direction.
Just my take on it. It seems to make sense after all of the head fake rallies over the past 3 days, weeks, months and years to wait for some level of conviction (either personal or market based) before committing more to the buy side at current levels.
Like Todd and I, the market has a lot of "issues" to deal with.
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