Pre-Market Weakness Can’t Stop The Momentum
Despite some bad economic data pre-market this morning, stocks have pulled off their lows from the open and are mostly in positive territory. The S&P has regained the 1000 level and is poised to move upward.
This is a clear strength signal regarding the momentum of this market. I tend to this we will be slightly positive for the next few days and then the jobs report will be the catalyst after that.
Again, when momentum takes over, fundamentals are meaningless. Fundamentals will come into play at some point, but in markets like this, it usually takes longer than we think. Extreme patience is required if you’re trying to bet against this trend.
As I mentioned yesterday, I’m looking to close out my SSO position prior to Friday. I’m hoping for a couple more percentage on the upside on the broad market so I can close this trade out then sit back and watch a correction (wishful thinking probably, I know).
In other news, Simon Property Group (SPG) reported their earnings this morning and reported lower funds from operations. Zacks put out the following statement:
In the office area, there is significant negative absorption as layoffs result in empty cubicles and companies trying to sublet their extra space. Store closings mean that there are empty stores. The last thing the REITs need is more new space coming on line to add to the problem. This is a difficulty that is going to last for a few more years, and I would be very wary of owning the big REITs like Vornado (VNO), Simon Property Group and Host Hotels (HST)
Disclosure: I”m short SPG and VNO