Tuesday, February 23, 2010

Fast Money Doom & Gloom

Fast Money is always an interesting show because it features 4 traders and its always good to know why traders are doing what there doing. When this show is as bearish as it was today during lunch, it makes Stone Fox Capital much more bullish. Especially when we are already bullish.

So why were they so bearish today? Surely it was due to higher interest rates or negative earnings reports or a meaningful economic report. Nope. It was because of the weak Consumer Confidence report today. A report that is generally dismissed because of its lack of forecasting actual consumer spending trends.

The report showed that consumers were more bearish today then anytime in the last 10 months. Really? When you review the facts, how is that possible? The economy is growing, the stock market has soared, and job losses are now negligible yet consumers are really much more bearish then when the world was still falling apart? It's really absurd that none of the traders or even the host pointed out the flaws in this random survey of people that would probably rather eat dinner with their kids then answer these questions.

If anything, the drop appears technical in nature as the market bounces off the converging lines of the 20/50EMA of 1095 and 1098. The close will be key, but today's consumer confidence report will soon be forgotten by more meaningful reports later this week such as Durable Goods order, Home Sales (New and Existing), and Chicago PMI. How the market ends on Friday will be more determined by those reports that are likely to be bullish. The Chicago PMI is expected to clock in in the 59-60 range and I'm suppose to believe that consumers are as bearish as when it was in the 30s. Really?

What do they gain from pretending the report is scientific and factual? Any good trader should question the accuracy first. If anything they seem willing to 'fly off the handle', and just go with the momentum. Hmm!












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