WASHINGTON, November 10, 2015 – The sleepy Norfolk, U.K. village of Little Snoring (pop. 619) is situated close to England’s eastern coast. Its small private airfield was once known as “RAF Little Snoring” back in the 1950s when it served as a base for the country’s Cold War air defense forces, “whilst the other part now belongs to a potato-producing company,” according to Wikipedia.
Snoring, napping, watching potatoes grow—that’s an apt series of descriptors that could well describe Tuesday’s U.S. stock market action which found most stocks treading water. Both the Dow and the S&P 500 closed barely up after absorbing a nasty hit on Monday. On the other hand, the NASDAQ was off 12.06, courtesy of an iffy Credit Suisse report asserting Apple (symbol: AAPL) had chopped up to 10 percent off its worldwide component hours.
Translation: Apple isn’t selling as many iPhones as analysts thought they would. Result: Wham! AAPL closes down over 3 percent in active trading, taking down a host of semiconductor stocks in the process. That’s what had a negative impact on the NASDAQ (not to mention the S&P 100, a narrower S&P gauge that’s more tecchy than its bigger relative.
So instead of a decent recovery rally today… well, we could have been watching potatoes grow in Little Snoring, if they haven’t been harvested already.
The usual culprits are still skulking about in the market this week, including Fear of the Fed and fear that China will go out of business, perhaps even tomorrow. Both issues and a host of others seem to have blunted—for now at least—what looked to be an early-arriving 2015 Santa Claus Rally.
The market is getting short-term oversold once again, although today’s flat action might have slowed the arrival of another oversold bounce. But given the relatively low volume of trading, except the panic selling in AAPL and the semis, it’s still hard to get a read on market sentiment over all.
As long as market reads remain so murky, we’ll continue to hold off on trading tips for now. As has been so often the case in 2015, any move at all tends to be the wrong move, although we can’t help thinking that the hard selling in the energy sector is nearing its last lap. Our small holdings in refinery stocks are still behaving well, but sloppy, sleepy trading like today just doesn’t give us enough confidence to do anything more.