I’m a bit perplexed with the current market optimism. Having digested 3 weeks of ‘the sky is falling’, the talking heads are turning on us again. Asian markets closed up and Europe has opened up.
Caution is the keyword today. Let me give you a few reasons why:
- Dec ’11 Gold Futures this morning are up at 1798 GLD
- There’s a gap to fill
- SPY Sitting at resistance and Futures are weak ES_F
- VIX remains elevated
- Low relative volume
Option pricing remains a bit confounding as if directional bets are off. It looks like straddles are the strategy of choice.
The Case Shiller, Consumer Confidence, and FOMC meeting minutes are all released today. My sense is that after yesterday’s melt up, any positive news today will play well for the bulls. And that any negative news won’t have much impact.