Today was a non-event. Stocks, bonds, gold, oil had very nominal net changes. However, we have GDP tommorrow, three dow stocks report. OPEC meets this weekend, WMT sales on Saturday, Iraq elections, and the Fed meeting next week. Strap yourself in.
For the bulls, I paint this scenario. GDP comes in at 3.3% for the 4th quarter. It is just weak enough to make some pundits postulate that the Fed will slow down a little in their rate increases. The three Dow stocks that report- McDonalds, Procter and Gamble and Honeywell all report good results as expected and offer optimistic guidance. Walmart says their sales will be above the middle of their 2-4% range. OPEC meets and decides against any further production cuts. Iraq elects a government and the process is considered credible even though not perfect.
As a result, oil in electronic trading before Monday's open, drops $3. Stocks have an upside gap opening,up 100 on the dow. Stocks close on their highs up 165 for the day.
Do I believe the scenario above? Not really.Is it realistic and possible? I thicnk so. As Bruce Kovner, one of the best hedge fund managers ever, was once quoted as saying "One of the jobs of a good trader is to imagine alternative scenarios.
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