Stock traders are trying to shake off yesterday’s 450 high-to-low reversal. That is going to be tough.
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The reversal seemed to come out of the blue. By the end of the day, some commentators were trying to pin the blame on the JOLTS (job openings and labor turnover) report. This report, which is one the Fed watches, showed a surge in job openings in July to a new all-time record. Layoffs and firings also fell on the month.
This data is another check in the tightening column for the Fed, but it didn't send the Dow down 450 points from the high. Most likely, stock traders sold after they sensed the market would not be able to hold some key levels identified by the chart-trading crowd.
The only thing we do know is the market is going around in circles — maybe circling the drain?
Continue reading about market uncertainty, data dependence, and Fed tightening.
Dwight Johnston is the chief economist of the California and Nevada Credit Union Leagues and president of Dwight Johnston Economics. He is the author of a popular commentary site and is a frequent speaker at credit union board planning sessions and industry conferences.