Economics

   This Week’s Data

    October auto sales plunged 33.8%; but that was in line with expectations and reflects the end of the ‘cash for clunkers’ program.
    http://www.calculatedriskblog.com/2009/11/light-vehicle-sales-105-million-saar-in.html

    The International Council of Shopping Centers reported weekly sales of major retailers up 0.1% versus the prior week and up 1.9% on a year over year basis; Redbook Research reported month to date retail chain store sales rose 1.9% versus the prior month and 0.9% versus the comparable period in 2008.

    September factory orders increased 0.9% versus estimates of 1.0% and a -0.8% reading in August.
   
   Other

    Was Monday’s ISM report signaling inflation (short):
    http://bespokeinvest.typepad.com/bespoke/2009/11/was-yesterdays-ism-an-early-warning-for-more-inflation-down-the-road.html

Politics

    The costs of medical care (medium):
    http://article.nationalreview.com/?q=YjYwM2EzM2JkOTkwMjU2ZWRhYWI0NzFiM2JmM2I0MmM=&w=MA==

  Domestic

  International War Against Radical Islam

    Christopher Hitchens on the Afghan election (or lack thereof) (medium):
    http://www.slate.com/id/2234333/

The Market
    
    Technical & Fundamental

    Investment strategy from John Hussman (long):
    http://www.hussmanfunds.com/wmc/wmc091102.htm

    The indices (DJIA 9771, S&P 1045) remain in a kind of schizophrenic limbo.  Yesterday the DJIA was down, the S&P up. The dollar was up a little (keeping it above the upper boundary of its latest down trend and based on the recent tight inverse price relationship with stocks/gold and commodities should have meant that stock/gold and commodity prices would be down; score: S&P up, gold up, DJIA down); the VIX was down (but remains above the upper boundary of its latest down trend, suggesting a downward trending Market; see above); and as noted above, gold was not just up, it broke above its old high thereby re-setting an up trend, leaving yours truly embarrassed over the latest partial sale of gold.

    Making the pin action all the more confusing is that one would have thought that both the strong factory order number reported yesterday morning (signifying an improving economy) and the announcement of Buffett’s purchase of Burlington Northern (suggesting that at least some stocks are still attractively valued) would have had a big positive impact.  Not to be. 

    Finally, the off year elections somehow have to be factored into this equation with  the vote certainly supporting the continuation of gridlock--which is a positive.
    http://www.ritholtz.com/blog/2009/11/king-report-political-bombshells/

    So we now have four factors (better revenue growth, improving macroeconomic conditions, multiple corporate takeovers and gridlock) that normally one would think would be propelling stock prices up.  But they are not.  Plus the dollar/gold inverse relationship appears to be weakening.

    All of which bring me to two fundamental and one technical question (1) what is going to drive prices higher? and (2) if stocks can’t go up on good news, what happens if we get some bad news? (3) where and when will the Market define the lower boundary of this trading range?

    Frankly, I can think of a lot of good, reasonable answers for all these questions--which means so can everyone else.  And that likely explains the current stand off: lots of things can happen, some good, some bad; but no one has any strong conviction as to the probabilities thereof.  Hence, the churn; and we wait for the Market to define for us the lower boundary of this trading range.
    
    The latest from TraderFeed:
    http://traderfeed.blogspot.com/2009/11/midday-briefing-stocks-in-range.html