For all the talk of bull and bear markets, the fact is, for the last couple of years, this has been a shark market.  It never simply stalls.  instead, it has moved strongly higher or strongly lower, but drifting hasn’t been an option. 

That’s why the current market inaction leads me to believe a big move is going to happen, as stocks have largely moved sideways grappling for traction while looking for a catalyst.  There isn’t a sense of panic, and buyers are emerging every session to nibble on large dips.

There is no fear according to the VIX, but there is palpable anxiety that might be tough to measure or detect with typical tools other than your eyes.  The market is grinding, and that means it needs answers.

VIX

For now, the next big potential market moving news will come from the jobs report on Friday.

Employment Gusher

On that note, this morning’s employment report from ADP was in line with consensus, but January was revised higher to 300,000 from initial count of 213,000.

Goods producing job additions of 44,000 is great news, but the 12,000 job losses among small business with 19 or fewer workers underscores the inability to compete when wages and benefits are soaring.   On the note, medium sized companies (50 to 499 employees) created 95,000 jobs.

ADP

Workers Go Shopping

Speaking of good news, we continue to see very good news from retailers, including Dollar Tree (DLTR) and Abercrombie and Fitch (ANF), which is up 23% on a monster earnings report.  ANF beat on every measure:

• Same store sales +3.0% consensus +1.4%
• Hollister +6%
• Operating Margin 12.8% from 9.9%
• Guidance 2 to 4% on revenue versus consensus 1.1%

The big loser today is energy and healthcare.