The retreat has been slow and uninspiring, as volatility remains low (VIX below 13 still) and price action very mild intra-day. There have been no sell-offs, just jerks around as Trump, his cabinet members, the Fed members and politicians talk while the banks post record results.
Today, retailers warned of lower than expected sales in December, so that sent XRT down over 2%. The industrials sectors was the bright spot.
The markets refusal to collapse is met with put buying. The SKEW again marked above 140 - a number rarely reached - for the second day in a row. Until that put buying subsides, the market is not going to make any headway higher.
With Trump's inauguration tomorrow the traders are loaded up on puts. Secretive missives from his staff that immediate Executive Orders are coming places a lot of fear of trade sanctions that could hurt business. Anything but positive remarks tomorrow or this weekend, could set this market flying in either direction.
I am 100% in cash as weakness until February should pick up soon. Trades will show up, but we need not force them right now.
