Markets maintain a flat posture today. SOX is 418, under 425, so market bears are happy. In addition, the VIX moves above 14.47 providing additional bear happiness. However, the broad indexes are not yet cooperating with the elevated volatility, choosing to move sideways instead of selling off. The Fed's easy money and the money fleeing Europe continues to pump new asset bubbles in the States. UTIL printed above 512 today. XLF is 17.98 remaining above the 17.80 bull-bear danger line so the bulls are happy.
The SPX finally printed a lower low than yesterday fulfilling the typical market behavior expected after a strong Wednesday selloff. The SPX is 1553 under the 20-day MA at 1556.60 so pay attention to this number as resistance. The 200 EMA on the 1-hour chart is 1545.55 so watch this number as well. The 8 MA remains under the 34 MA on the 30-minute chart indicating bearish markets ahead. Keybot the Quant remains short and the bears are cruising with the elevated volatility. VIX 14.47 is the most important parameter to monitor today to determine broad market direction. Gold sits at 1552 fighting the important 1550-ish bull-bear line in the sand (reference yesterday's charts). Copper is staging a comeback. Commodities continue to collapse, GTX now crumbling lower to 4729. As highlighted last evening, the CRB end of day print at 289.77 fosters the deflationary theme. The 10-year yield is 1.76% (last year's level at the end of the year). Crude oil is falling now at 92.34 which should create market negativity.
Note Added 2:10 PM: The euro thrusts higher over the last hour now at 1.2938 well above 1.29. This will only serve to further hurt European exporters and manufacturers. The up euro creates buoyancy in the equity markets. The SPX is back testing the 20-day MA at 1556.71. SOX is at 420. VIX drops lower to back test the critical 14.47 level. The move in VIX right now will likely dictate the market direction the rest of the day; up VIX and bears win, down VIX and bulls win. TRIN is 0.74 providing the bulls an edge today.
Note Added 2:35 PM: VIX drops under 14.47 so the bulls fight back and send the SPX to 1559. TRIN is 0.75 so it is easy for the bulls to keep the markets buoyant today. SOX is 420. XLF 18.05. Watch VIX 14.47. The euro is 1.2948 so use this 1.2940-ish level as a gauge. Market bulls are happy if the euro remains above 1.2940, bears will be happy if the euro drops under 1.2940.
Note Added 4:02 PM: SOX finishes under 425 but at the highs for today. VIX finishes under 14.47 and XLF above 17.80. So the three main parameters affecting market direction remain in the same place as the start of the day. TRIN is under 0.80 today so the low TRIN and the VIX dropping all afternoon provides the lift to equities. The SPX finishes above the 20-day MA at 1556.90 which is a feather in the bull's cap. The bulls recovered one-third of yesterday's losses. Utilities, UTIL, finishes at 512, a phenomenal 18% gain in only four months time. Utilities are gaining one percent per week since November due to the Fed creating new asset bubbles with QE4 Infinity and Beyond. The money fleeing Europe is now pumping the safe haven and defensive stock bubbles even higher. Interesting times. The Monthly Jobs Report will set the tone in the morning.
Economists have cut their March jobs forecast so the numbers should generate a rally in the market as the Fed wants. They manipulate every eco-data that's out.
ReplyDeleteThat is a good observation. It is the same as earnings. In the confessional season, companies hack their estimates to lower the bar, then the earnings easily meet or beat and the stocks are happy, but they are actually only beating lowered estimates. This is setting up the same way for this earnings season. Same old game.
ReplyDeleteBut the same dealio occurs with other data events, like the Jobs Report. The weak ADP Report at 158K dampened the spirits and lowered estimates. Over 200K jobs were expected, and still is, although many now call for 170K-190K, so a buffer is now created where anything above 170K will likely be perceived as meeting expectations. Of course, however, the sub 170K number is very much a possibility.