Up, Down? How About Sideways Equilibrium?

A relatively favorable set of numbers weere released today as Industrial Production for November rose at the robust rate of 1.1% after falling 0.7% in October (revised from -0.4) and Capacity Utilization shot up to a healthy 78.4% (October 77.7%), but what may have spooked markets was the fall in CPI of 0.3%, a deflationary indicator, which is the bogey man that central bankers and governments worldwide like awake at night fearing.

Deflation implies stagnation and decline, anathema for the "growth" economies, though in nature, it's a natural part of the cycle. And that is part - though not all - of the reason that economies (especially ones built on a fiat foundation) are all built to fail. They are unnatural creations and they eventually cannot compete with natural cycles, physics and math.

So, stocks fell today, despite some good news. On the other hand, the "lawmakers" (an obtuse term presently, as the congress-critter and the president haven't done much in the way of actual writing of legislation for about a year and a half) in Washington aren't actually there at the moment, many having already headed home to their respective districts, the regular house session actually having ended yesterday, though it is scheduled to resume on December 19 (five-day weekends... must be nice). Consequently, there was no business concerning the ongoing "fiscal cliff" negotiations.

Stocks have reached a level resembling a sort of equilibrium (just look at the A-D line or new highs-new lows), which is a nice way of saying that it's a bad time to be either a bull or a bear, because nothing's moving, though one might expect some fireworks as the year draws to a close and it becomes more and more apparent that whatever fix is applied to the nation's fiscal woes - if any - it will be a patchwork, quick-fix and probably insufficient.

Nothing could happen, though, with two straight losing sessions, the direction of the market could have subtly changed.

The markets should react, but they don't have to. What happens over the next two weeks is anybody's guess. There are just nine full trading days until year's end. The exchanges are closed on the 25th and the 24th is a half-session, closing at 1:00 pm ET.

Something's got to give, or maybe not. After all, we've been muddling through for four years and most of the sleep-walking sheeple haven't a clue what's going on and the people in charge don't seem to care, and that's not a new phenomenon.

Well, it's Friday, and it's Happy Hour somewhere.

Free houses (and $billion a month from the Fed) for everyone!

Dow 13,135.01, -35.71 (0.27%)
NASDAQ 2,971.33, -20.83 (0.70%)
S&P 500 1,413.58, -5.87 (0.41%)
NYSE Composite 8,333.74, -4.58 (0.05%)
NASDAQ Volume 1,806,388,500
NYSE Volume 3,177,329,750
Combined NYSE & NASDAQ Advance - Decline: 2627-2840
Combined NYSE & NASDAQ New highs - New lows: 88-64
WTI crude oil: 86.73, +0.84
Gold: 1,697.00, +0.20
Silver: 32.30, -0.056