The futures say something about the character of this market. Of course they are down. Not anyone thought differently. It is the natural coloration of this market and I find it most telling.
It wasn't always this way. There was a time when the futures would naturally trade up, simply because we would go up on Mondays as money would come in. That was a distinctly 1990s phenomenon, but those of us who worked through that period generally PRESUMED the market would be higher.
Now we just expect them to be down, as we have been for ages, because of Europe, even all the major markets are UP for the year, except Spain which is down 10% (not bad given the depression over there).
Given that Europe's been up more than it has been down the problems are not just theirs. We have become conditioned in this country that the path of least resistance has become down. We know that revenues have been subpar this quarter, although the bottom line has been pretty good. We know that many companies have actually done quite well in this period, particularly if they are levered to housing or retail, both gigantic components of our economy.
But the gloom is so palpable that it is engulfing and it explains a lot about why money comes out of the market regularly.
My advice is that the best way to invest in this market is to have a list of the companies that not only had good quarters, including good REVENUES, and also gave you strong outlooks, companies like Panera (PNRA), Honeywell (HON), International Paper (IP), Yahoo! (YHOO), PPG (PPG), SBA Communications (SBAC), Time Warner Cable (TWC), Verizon (VZ) and Comcast (CMCSA) (I work for Comcast) come to mind. I single these out, also, because they have remarkably good charts that conceivably could bounce when trading eventually opens. They will get hit with the rest of the stocks because of the futures and then you can pick them up.
You see, once you recognize the gloom you can then adjust and take advantage of the futures that translate the gloom into lower prices for all.
Now, of course, the theme of this moment is an acceptance that there are very few companies that can fit the buyable bill. But as we know money is leaving the market week after week after week, there is a riptide of money out of one sector into others and the stocks I have just highlighted are the strongest charts with the strongest fundamentals of some fairly strong sectors.
One day we will be able to get past this moment, whether it's because the fiscal cliff and the election will be resolved, or China's stimulus kicks in or Europe gets written off to the point it can't hurt us much. Yes, I am now giving up on a European comeback because they are doing nothing to inspire one.
Until then we play the edges and we exploit the few advantages that this market gives us right now to make money.