Obama Talks Big Game, Sparks Little Enthusiasm

Last night Obama unveiled his big jobs plan, but it looks like it did little to improve sentiment this morning. Maybe he should have been this diligent with his first fiscal stimulus plan.

Credit default swap prices are all higher this morning, with Greece surging to record highs. The market is acting like a Greek default is both a near certainty and also imminent.

Asian markets were lower overnight. Japan's Q2 GDP came in at -1.5%, and China's CPI eased a bit coming in at 6.2% for August. Europe is also lower this morning, with considerable pressure on the banks again.

The flight to safety trade is half on today. The dollar index is higher, reaching a five month high. And Treasury bonds are higher, pushing yields on the 10-year Note back down to 1.97%.

The higher dollar is pressuring most commodities, with oil prices pulling back to $87 and gold prices down slightly to $1850.

I have been talking about the stubbornly high VIX index. Today it is another 11% higher to 38.0. The market has not had any calm days this week. It has been either up big or down big each day. As of now, the SPX is slightly negative for the week while the Nasdaq is still positive. We will have to see if we get any short-covering into the close.

Trading comment: Every time I begin to question my cautious stance we get hit with another vicious selloff that validates my thesis. Until we get some clarity out of Europe, better economic data in the U.S., or good news on the earnings front I don't see how the market can muster much more than the trading bounces we have seen. For the last month, the SPX has traded in a range between 1120 - 1220. It will be interesting to see which side of said range gets broken first.