Stock Slide: It’s Not the Data, Dummy!
"Stocks Slammed by Economic Data!"
As a trader and a talking head, I can understand the appeal of blaming the drop in stocks today on economic data. Put a gun to my head and give me 30 seconds to explain the ongoing sell-off in five words and I'd probably blame the data as well. Then I'd throw the bad sales information from GM (GM) and Ford (F) into the mix, grab some guy to mumble a quote about more bad data in front of us and hit "send."
It would be a column but it would be a bunch of garbage. Today's sell-off isn't about economic data. Why not? Because everyone on earth knew this week would be an unmitigated disaster in terms of economic data. I said so and even took the time to write it down for folks who can't listen to the audio while surfing Breakout at work. Right there a minute and forty seconds in: "The Data Will Suck."
You may object to my phrasing but you can't say it was a false characterization of the economic news so far this week.
Today's sell-off isn't about lousy data everyone saw coming. Today's sell-off is about two things: 1. It's a short week during the summer; a few leviathans can move markets without it "meaning" much of anything. 2. The market is in a negatively biased trading range. 1,340 is now very obviously resistance and 1,300-ish is support.
The data will remain lousy. The sky will continue to fall and economies both foreign and domestic will remain weak. But none of those are the reason we're off 200 Dow points today.
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