Coelacanth

Options Trader: Wednesday Outlook

Good stuff Philip.

I suspect some risk aversion will come creeping back in to the market soon. When I checked the put to call ratio in Barron's over the weekend I was struck by how much skepticism still remains. I don't think bears are wrong.....I just think they're a little early.

I'm blown away by how much bad econmic news investors are currently discounting. Economic fundamentals ultimately matter. If they didn't we wouldn't be paying central bankers to track them.

Domestic retail sales have been, at best, stagnant over the last 2 or 3 months. Anyway upward surprises have been due more to higher food and energy prices than any extra spending. It speaks to a certain disconnect in the market place to hear bulls blithly recite the old refrain that consumer spending makes up roughly 65% of our GDP but then act like it doesn't matter now.

It'll matter to them when it shows up in the form of negative earning surprises 4 months to 2 years down the road.