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

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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.

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.