Macy's meltdown was sobering

Macy's meltdown was sobering - but explainable given the shift to online, as it literally eliminates middlemen, and presses the ability to maintain margins for a lot of businesses, even if they match prices with low overhead virtual stores.

I do believe however, that the strong Dollar has more of an impact on all these known 'brick & mortar' versus online battles, than is recognized. In New York a lot of pricey retail depends on international buyers; not merely Russians (they are a fleeting customer given the collapsed Ruble; but particular Canadians; a staple of New York retail that's often ignored; and whose 'Loony' is below par to the US Dollar now; inhibiting their buying power on this side of the border, as are policies really irritating our largest trading partner).

Elsewhere the Brits are pretty steady; because the Pound has not plunged like the Euro (I've argued for a couple years that Britain is brilliant by 'not' adopting the Euro, even though they're in the EU. Czech Republic similarly stuck with a wisely devalued Kronen. In Florida retail and entertainment venues (not just of course hotels, but theme parks and more) are extremely dependent on Latin American customers. They too are more strapped with spending ability in the currency wars still leaving Americans on-top of foreign spending prospects. 

(Perhaps the irony about 'imports' shrinking from South America has this tidbit today, which says something about the criminal class that remains in power in Caracas: U.S. agents arrested two relatives of Venezuelan President Nicolás Maduro on charges they conspired to transport 800 kilograms of cocaine to the U.S. The arrests, per the WSJ, come amid U.S. accusations that the top echelon of the government in Caracas is involved in the narcotics trade.)

The consumer shopping extravaganzas are being trumpeted in China, while a prospective further devaluation is ignored amid seasonal marketing nonsense in a way. What they will do (if it occurs and that's why Shanghai rallied in hope it occurs) is similar to what happens if Draghi's thumbs his nose at responsible monetary policy, and goes ahead with more QE from Europe's ECB.

Markets overseas would bounce and then be sold-into; while the US Dollar of course would resume strengthening (after the expected consolidation going on just now) and US stocks would be pressured further, given harsher competitive conditions for our exports, especially where comparable products are available from local producers or manufacturers in Asia or Europe. Here in Florida, only the British seem to have favorable buying power; which is also why the UK for now is among the least travel-cost attractive destination for Americans, while of course Europe is a basic bargain given the Euro near 1.07 as our forecast multiyear overall decline from 1.40 continues; and frankly it's not over yet. 

Putting aside the daily events, like the absurdly high 'art market' auctions that are slipping, or Russia's folly by now admitting a 'nuclear drone' submarine in design stages (I'll touch on these a bit via video); we're winning the expected 'battle-zone' in the S&P 2070-2080 area. Our Dec. S&P / E-mini short-sale up at the 2109 level continues for over a week; calmly focused on lower levels.

Technically- the market is flirting with a more sustained break of the last-ditch short-term support (this price level); and penetration can measure lots lower. In that respect there is no change to our views or focus on Wednesday being key (middle of the week too) for the Bulls. We thought they would falter; they did. 

Today we honor our Veterans as Europe observes Armistice Day (end of WW I of course). Our President made a nice speech about jobs; but not our history. Not to be political, but a member pointed something out: since honoring the June 1944 liberation of France, only 6 years since WW 2 has a US President failed to join giving respects to those lost in the Normandy invasion by 200,000 Americans and Allies; something the French and British always commemorate. The 6 omitted years were all during the Obama Administration. So, even with some good things accomplished, it's sad he couldn't find time to visit France, America's first Allie, whose naval movements very well may have made victory in the Revolutionary War achievable. Perhaps he will this June? Meanwhile we will say Viva la France & God Bless the USA, and not just on this special day.

Wednesday (final) MarketCast 

 Pre-2 o'clock balloon (intraday) MarketCast 

Daily action - while finessing intraday patterns of course for traders, and also sticking with our ongoing short-sale from Dec. S&P / E-mini 2109 for quite a retention time, has racked-up more downside gains; simply by leaving it alone or by taking partial profits and layering shorts back on during rallying periods. 

Fortunately, our assessment of the intraweek turnaround, and how mediocre it ideally would be, was correct, as well as our suspicion that the Dec. S&P had a probability of fading even in the final 15 minutes after the NYSE Closing Bell into the high 2060's. That's why happened, although bouncing a bit back this evening. 

Thursday will probably see an effort to get-up some steam for a bounce over the 2070 area at least by mid-morning; though we again wouldn't be surprised to see it falter as the day evolves. Too many pundits with an explanation for a series of equity busts; and few (even if they acknowledge rolling correction) at this point will clearly state the un-manipulated logic for a lower S&P level.