Markets muddle along sideways as the new trading week is underway. The dollar and euro are flatish so the market languishes unable to commit. Neither SPX 1375 or 1366 levels were hit so neither the bulls or bears win today, so far. Volatility took another dip today, the complacency grows; the SPX:VIX ratio now at 83 well above the 68 danger level and very bullish. Look at the flight into perceived safety with the utilites, UTIL jumping almost a percent today, a defensive move. Copper and commodities are holding up since the dollar and euro are flat.
The market bears best chance would be seeing a stronger dollar and for the CRB to move under 313; it was weakening in earlier trading. If SPX loses 1366 handle, the bears will accelerate the downside. If the SPX touches 1375, the bulls will accelerate the upside. A move thru SPX 1367-1373 is sideways action. The Nasdaq is leading the SPX to the downside, so more weakness would be expected today. AAPL is up three bucks, so as Apple goes, so goes the markets. AAPL chart is negatively diverged now with two doji candles showing for the last two days; a prime area for a pull back.
Note Added 3/12/12 at 1:12 PM: The beat goes on. SPX took a funky drop at noon touching a 1366 handle but then spiking higher. The bears got nothing unless they see sub 1366. AAPL remains up thus far today so this is bullish overall. The COMPQ is leading the SPX down so this is bearish. Hence, a market languishing thru the sideways range. Keep watching VIX to see if it takes additional stair step moves higher today, each move higher in VIX is a move lower in the markets. JJC is printing 49.26 and the danger level is 48.75 where the broad markets would weaken. For now, the bulls are content with markets moving merrily sideways. The energy sector is weak today. SOX 413.60, JJC 48.75, CRB 313 and SPX 1375 or 1366 are the levels to watch today. Bulls are keeping semi's, copper and commodities elevated above these levels for now, so bears can only start trouble if they puncture thru one of the three levels shown or if the SPX drops under 1366 today. Otherwise, the day moves sleepily along with the market bulls in control.
Note Added 3/12/12 at 7:15 PM: Markets continued the sideways trek into the close after trading in a tight range, the SPX stayed within the 1367-1373 zone all day. Tomorrow this range tightens a bit more so a likely winner will come out one side or the other, bulls out the top, or bears out the bottom. URBN reported earnings tonight and is now being beaten mercilessly. URBN popped at the close but dropped over three bucks down to 28-ish in the AH (afer hours trading). As the Key Events missive pondered yesterday, perhaps the cracks in retail will show this week? Retail Sales occur in the morning with company earnings continuing all week long. Volatilty finished the day at or near the lows showing that bulls have no fear, after all, markets never go down, right?
If you get a chance, can you please take another look at the VIX chart? Many thanks.
ReplyDeleteHello Weaver, volatilty is....volatile. VIX weekly chart remains positively diverged, same-o for the VIX daily chart. Sometimes price does odd things, however. Thus, the charts consider the VIX to be basing now and ready for a launch, keeping in mind that it just printed a low today. The interesting thing about the VIX is that it can reverse and run the same amount just as easy.
ReplyDeleteOpEx is probably adding volatilty to the volatility as well. The move lower shows that traders are becoming even more complacent. Projection remains up. Plays such as VXX and TVIX are dangerous but remain attractive now for a nice bounce. These are high risk plays where lots of dough can be lost. For today, $VIX is up one buck off the intraday botom at 15.23.