A very interesting week to say the least. Oil sets a new all time high while at the same time S&P breaks 1425 and looks poised to move higher. Wall St. is in the business of explaining things but this week showed why these day to day explanations are meaningless. Last week when the Dow dropped over 100 points it was because of oil. Well guess what oil was higher this week than last week and the Dow finished higher this week than before the drop. This week was driven by a large part by options expiration on Friday. Hard to take anything away from the strong move Thursday and Friday (Friday was a strong recovery). My guess is we will be down at least initially on Monday as investors repositions their portfolios after the options expiration day. The S&P broke some key technical levels though so who knows.
This past week the news was again pretty abysmal on all economic fronts. That has been reason to send the market up. The worse the news the stronger it rallies. Genius. At some point it will catch up. One thing that I don't think is as bad as the bears are making it is the consumer confidence data. Came out on Friday that it was the lowest it has been since 1980. I look at that number skeptically. It is based off of Americans who for the most part have lived in 25 years in a period of economic growth and prosperity and who have been able to consume consume consume. So now all of a sudden you can't buy your 16 year old little spoiled princes a Prada purse and the world is falling apart and the economy is blowing up. The 1980 reading was after years of the Vietnam War, staggering inflation, and Cold War threats heard daily. Americans were much more hardened to deal with pain and things were indeed much worse economically in 1980 than they are today. Don't get me wrong, there are things that troubling today economically that the market seems to be completely ignoring but the average consumers are glum because they can't buy toys like they did in the years past not because gasoline is being rationed or they don't have a job.