Mercurial Market

The mercurial market strikes again! Stocks surged after the Street digested the November jobs report and determined a not-too-hot, not-too-cold jobs growth; in fact, it’s just right. This environment is perfect for slow, steady hikes in interest rates.

Ironically, the 370-point rally in the Dow only got the market to break even for the week and it is close to breaking even for the year.

There was no conviction as many big movers rallied on light volume, but that can change with a move through the Dow at 18,300, perhaps next week.

In the meantime, the Organization of Petroleum Exporting Countries (OPEC) has taken the game of chicken to a whole new level, opening the spigots even more despite a global glut. I would say that Saudi Arabia is going in for the kill on America’s fracking miracle. However, the news is great for airlines and maybe even retailers.

So, the world goes into Friday, looking for OPEC to cut its output; instead, an increase of 31.5 million barrels a day from 30.0 million. The oil cartels own estimates suggest that the third quarter of 2016 will not lead to an oversupply in the marketplace. They really are going in for the kill against American frackers.

Speaking of retailers, Home Depot (HD) and Costco (COST) are brick-and-mortar steamrollers, and blue- chip havens that look great for those who have wasted so much time on the sidelines to ease back into the game. On that note, volume was light and the internals were shaky.

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Bad Breadth

Since 1940, the S&P 500 has been up 2% or more-393 times in a single session. Only seven of those times, including last Friday, saw more losers than winners. The market breadth was abysmal. Sure, there were more advancers than there were decliners, and volume was heavier in the winners than the losers. A shocking number of stocks closed at 52-week lows.