In a world where sometimes you’re the windshield, sometimes you’re the bug, we have thirteen trading hours left to the week, the month, the quarter, the half, and the year.
U.S. equity futures point to a higher open in the premarket action, the next to last trading day of 2017. I do
expect bullishness, no matter how weak, going into Friday and then maybe Jan. 2-3. That would define this year’s Santa Rally. Yet, bullish sentiment, as measured by aggressive buying, isn’t there. Still, the charts will lead the way showing sentiment as always.
As mentioned, details on any infrastructure rebuilding, if announced early in January, could continue upside bubbling in this already overvalued market. Recent economic data is a little wishy-washy, after all, and the market is NOT ignoring it, as witnessed by the bond market and dollar action this week.
Still, this IS the stock market. This is all normal in an abnormal year. FOMO (fear of missing out) has been one factor holding us up, but we will need those encouraging infrastructure detailed announcements (from whatever source) to push us higher without a pullback of sorts.
That’s why the earnings season will be so critical as always. The market, we are told, is incredibly expensive. Trading at 25.80 times earnings for the last twelve months of earnings, the SPX is indeed pricey. The great equalizer in this chess game, as always, will be the fourth quarter earnings reports which start surfacing Jan. 17, 2018.
One thing I know after being involved in these markets since the earth’s crust started to cool, optimism may drive momentum but it ultimately needs verifiable data as a food source to continue its upward trek. After all, what better time for the market to perform its magic trick than when everyone is on one side of the trade, as now.
Pull the rug, says I, Mr. Market. Give those of us who have not been in this roaring upside of 2017 a chance to buy the dip. The deep dip.