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There have been a lot of mixed signals in the market about whether this correction is wrapping itself up or if its just getting started. Let's go through a few of the things that I have seen and see if we can come to a consensus over what is going to happen over the next few weeks.
First we have retails sales coming in almost a little better than expected. The Wal-Mart issue was leaked so that helped when they said that there was still time to get the quarter in order. Other signals. like the rumors of Best Buy laying off and closing more stores give the opposite felling to investors.
Next there is the increased volatility in the market. This could point to lower prices in the near future, but Tracey pointed out that when the VXX, an ETN that tracks the VIX, is trading at all time high volumes that could mean that its time to think about what that says.
Then there is the idea of options activity increasing as cash generators continue to look to write calls or sell puts in order to squeeze some more money out of their current positions. Those income chasers are really getting hurt here on the increase of volatility of late, so will they continue to chase stocks if they run up and away from them after seeing their shares called away.
Finally we have the cash pinch going on. The increased taxes are eating away at disposable income and the high price of gasoline is also doing a number on the pocket book of middle and lower class Americans. That lack of cash is not going to help things along.
That all being said, do you see the market moving higher or lower over the next few weeks? And which of these items (or any other ones) can you point to that support your argument?