Not A Locomotive But It’s Still On Track

Technically, the bull market is alive and well; in reality, it’s old and dragging into the end of the year, hoping to finish in the black. It’s not a locomotive to be sure, but it’s on the track and a few thoroughbreds are pulling it. So, we head into the last two sessions of the year with major indices, taking a page from the Little Engine That Could-thinking it can move into the winner’s circle.

On Tuesday, the Dow closed up 190 points, but it’s still not able to take out a recent high, so that series of lower highs in place is setting up a day for either a major breakout or a disappointing pullback.

The market breadth got a whole lot better Tuesday, as new highs outpaced new lows. The indicator is not as simplistic as it might seem. The market needs a much broader leadership to get into gear for 2016.

Confidence Trends

Tuesday, Consumer Confidence came in better than expected, but it still had a couple of yellow flags. Overall, the trend continues to be lower, although 96.5 were well above November’s 90.4. And people are feeling better about the job market.

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However, that one element that has given Janet Yellen fits continues to reverberate in an assortment of data. While all the job questions expressed greater confidence, when asked about wages- it was the exact opposite. Punk wages have been the bane of this recovery; most people who are aware of more jobs don’t think they’ll have the power to demand a raise.

Confidence will have to be earned; and yet, the kind of economic backdrop needed to spur growth must already have a dollop of confidence to begin with.