I think we needed a down day if we want this market to meander higher. Here's my reasoning:
1. The notion of the Republicans as shoo-ins with this ragtag group of Tea Partiers seems quite wrong to me. We have a popular president and a well-financed Democratic Party, and a lot of what could be considered kooks running in key states like Nevada and Delaware who don't seem like winners to me.
2. QE2 is now being discounted to the point where we have to think it will be a buy of the S&P futures to move things up more.
4. There were genuine non-crosscurrents yesterday. For example, oil was down early because of the strong dollar, but then we actually got a bulge in inventories, so it actually made sense for oil to be down. Typically, the actual fundamentals do not matter.
5. We had some visible falterers yesterday to combat Broadcom and F5 Networks, notably Whirlpool, which was disappointing, and Jones Apparel, which was very, very disappointing. Sprint Nextel really didn't deliver at all, and I figured that you could win either way with Sprint--better earnings or a takeover--and we lost the first catalyst for certain.
6. The big international companies like Caterpillar, Boeing, and United Technologies need a weak dollar to keep rocking. It's their real edge.
7. Today's jobless claims are key, so it would have been tempting fate to bet that we could be up for seven straight days, which is how long the streak would have been if we closed up last night.
8. The bull/bear is inching, inching, inching up to where the bulls are getting too prevalent. Without more ammo--more money coming into the market--we could stall out.
9. Much covering has occurred in the Netflix/Chipotle Mexican Grill world, and that's what moved these stocks the last 10 points each.
10. It is October. Don't you think that we should have at least one serious selloff in the so-called worst month ever? How many bears can we shoot in one month? The season may be over!
Disclosures: At the time of publication, Cramer was long BA.
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