Omicron All Over Again

When omicron came out in November, the market fell and then rallied to new highs. Why? People believe the market moves are news based and therefore attribute negative market action to whatever is current in the news cycle. In the extreme short-term, news does move the market if it is new information, but people assume this is always the case.

Here is the S&P 500 Index in 2007. The first drop was a little more than 10 percent. The market rallied back to around the 61.8 percent retracement level, it bounced around the 23.6 percent level up to the 50 percent level, and then rolled over.

Here is the S&P 500 futures now. The first drop was a little more than 10 percent. The market rallied back to around the 61.8 retracement level, it bounced at the 23.6 percent level up to the...we'll find out. The 50 percent level is 4512. Might be a good area to start shorting again.

What's the bigger problem for the market? Interest rates keep moving higher. Crude is coming down and that is good for the market, but crude is mainly a threat to the market because of what it does to interest rates.