A Giant Rat: The Market’s Unexpected Trick Or Treater

Last Thursday night, we saw vampire bats overhead as we thought about the possibility of stagflation-the terror and awe of it.

Early Friday, a better than expected GDP of 2.9% helped boost the market. Fears of stagflation apparently abated.

Then, by midday Friday, a rat of Gulliver’s proportions rolled in. Quick to analyze why it grew ginormous, investors snared it, pinned it to a circuit board and then hooked up the rat’s head to electrodes.

And what did they discover? Did the sight of a huge rat threaten the status quo?

Let’s examine. In the world of the indices, NASDAQ, the bullish holdout, ended the week in an unconfirmed warning phase. Perhaps not quite a move of giant rat proportions, it does nonetheless upset the status quo.

The Dow, and its vigilance to maintain a price above 18,000, kept the status quo and closed unchanged on the day and slightly up on the week.

In the Modern Family sectors, Biotechnology took off its oxygen mask closing under the key weekly moving average. Seems what little speculative flow of money remained drained out of it.

Meanwhile, Semiconductors and Transportation continued to glide while Prodigal Son Regional Banks fell.And Retail tried hard to resurrect. Whether those small gains last into Monday remains to be seen.

Consensus thus far-the rat appears adequately docile. However, our techies wonder what will happen if he gets really hungry?

We got an inkling of what a hungry rat might eat when the news about more FBI probing of Clinton’s emails hit the markets. Later, reports that the emails are not from her personal server mildly stabilized prices.

We saw soft commodities, a featured highlight last week, give back some of their advances. Perhaps a hungry rat will search for Corn, Soybeans, Wheat and Sugar as those soft commodities declined.

Our rat though, left Coffee and Cotton alone. Both rallied last Friday along with Gold, Silver and Miners. Perhaps the metals strength had more to do with the US Dollar easing from its muscle move higher earlier in the week. Perhaps it is the perceived safety net in case the rat’s family shows up.