The Pennsylvania winds are blowing knocking out service intermittently. Winter continues. Markets are flat this morning after dropping on worse than expected Germany unemployment data about one hour ago. Cyprus banks reopen and depositors are only allowed to withdraw 300 euro's (about $390) and check their balances. There is no check-cashing or other regular bank practices. Transactions out of the country are limited as well so there is now an odd scenario occurring where a euro in Cyprus is actually worth less than a euro in the main continent due to liquidity restrictions. Things become stranger by the day. The bank runs appear orderly, mainly middle-aged and older folks that do not have ATM cards since they are the most cash-strapped. Markets in general continue along with a wait-and-see attitude.
Volume is very low the last couple days only running at about 75% of day's average expected volume, today will likely be less since it is the last day of the week, month (EOM) and quarter (EOQ1), and the Easter holiday weekend begins in only about nine hours. Markets are typically buoyant into a holiday weekend. The full moon yesterday morning created the expected market buoyancy this week. The last week is typically up so this seasonality factor remains in play. The SPX keeps teasing the 1565.15 all-time closing high but falls short. For today, the bulls only need one point of upside, to punch through 1564 and the 1565 will give way in quick order with the SPX moving up into the high 1560's. The bears need to push under 1552 to accelerate the downside. A move through 1553-1563 is sideways action. The 8 MA remains above the 34 MA on the SPX 30-minute chart so the bulls remain in control.
Volatility and commodities are important for market direction. Watch VIX 14.65. Watch GTX 4931. Bulls will gather strength if the GTX stays above 4931. Bears will create market weakness if the GTX drops under 4931. Jobless Claims and GDP are released at 8:30 AM. Chicago PMI 9:45 AM. Natty Gas Inventories at 10:30 AM. Kansas City Fed 11 AM. 7-Year Auction 1 PM. MOS and BBRY earnings are of interest. The 10-year yield is 1.85% steady after the large drop yesterday (move higher in bond prices). The euro is at 1.28 recovering from the German shock this morning. Considering the expected low volume, and bullish seasonality in place, the bulls should be able to take out the SPX 1565 all-time closing high today. GDP may offer the only surprise aside from the ongoing drama in Europe with Cyprus and Italy.
soon the all time high record on SPX will be history ...today or on Monday ...
ReplyDeleteV.
:D ...told'ya! :D
DeleteV.
Couldn't you make the case that the markets would be doing exactly what they are doing whether Cyprus was a factor or not? The wind blowing in PA and the longer winter may have more to do with the market behavior than Cyprus. Propaganda, nothing but propaganda.
ReplyDeleteJim Sinclair has quite a bit to say about Cyprus not being propaganda . . . http://www.jsmineset.com/ - Ande
ReplyDeleteWatch for a pop after Europe closes today. VIX and TRIN seem contained, and I think shorts may get antsy and start to cover
ReplyDeleteYep, the SPX punches through the closing high but it is not meaningful unless it closes above the 1565.15 today. The all-time high is 1576.09 so that will create the new drama target. The VIX remains stubbornly low and that is what creates the bull fuel each day. The VIX 14.65 will give the bears their turn. TRIN 1.11 favoring bears by a hair, interestingly, above one all day despite the new highs for SPX. GTX was moving higher the last day but fell on its sword at noon.
ReplyDeleteCyprus does matter, sure it is tiny, but you must realize the precedent it sets, that is why it is important. Little Cyprus changed the world since now any money in a bank is subject to confiscation. Obviously, if you have more than 100,000 euro's (about $130K), in any bank, you need to cut it up into pieces and open smaller accounts in several banks. That way you can be under the limit but also keep in mind they will likely lower the limit as time moves a long, so keep that in mind. In addition, now a euro in Cyprus is worth less than a euro in the main continent. Picture if you took a dollar from here in Pennsylvania, and walked across the line to Ohio, but in Ohio they would have entirely different rules governing the dollar; it would be a mess. Little Cyprus has changed the world. That said, focus on the Italy decision that occurs perhaps today.
That's an interesting point you just made about Cyprus. I've never really thought about it that way before. It's no longer just the currency itself, but it's the rules governing the currency. And a different set of rules changes the value of the currency. It really make sense. Basic economics. Suppy & Demand. But it does change the dynamic considerably.
ReplyDeleteI wonder how long does this conflict will happen in Cyprus. I hope their banks will continue and it will not get bankrupt.
ReplyDeleteAstana Economic forum