The two-day FOMC meeting begins today so the attendees are already at the morning buffet enjoying the free bacon. Today is the EOM. April began at SPX 1569 so this number is important today. At this juncture, it looks like another up month will be logged, but the day will have to play out. The monthly charts receive new prints today. The Case-Shiller House Price Index is at 9 AM. MAS, a key housing sector barometer, missed earnings on both EPS and the top line last evening. Chicago PMI is at 9:45 AM and will create a market stutter step. Consumer Confidence is released at 10 AM and will create a market pivot point. Farm Prices are at 3 PM which will affect the commodities sector. China Mfg data is released this evening at 9 PM. PFE earnings missed this morning.
The SPX printed a new all-time closing high yesterday at 1593.61. The all-time high remains at 1597.35. For the SPX today, starting at the 1594, the bulls need to touch the 1597 handle to create an upside acceleration; the 1600 plus numbers will appear in quick order. The bears need to push lower to 1582 to create a downside acceleration towards 1576. A move through 1583-1596 is sideways action today.
Volatility remains the key influence on markets right now. VIX is at 13.71 under the critical bull-bear line in the sand at 14.00 so the bulls have no worries. If the VIX moves above 14, the markets will sell off and Keybot the Quant, Keystone's trading algo, will likely flip short. Euro-area unemployment hits another record high and inflation is low ahead of the ECB's rate decision now two days away. European markets are already rallying in recent days as they anticipate the easy money from the ECB. The 10-year Treasury yield is at 1.65% representative of disinflationary and deflationary pressures. In a nutshell, VIX 14 and SPX 1597 tells the tale today.
Note Added 9:15 AM: Jeremy Siegel is a guest on CNBC business channel this morning and says that Dow 16K may be on tap this year; that would be a 150-point per month increase for the next 8 months straight. Also that the low 1.38%-1.39% yield on the 10-year Treasury would hold as a permanent low. Of even more interest, when talking about dividend stocks, Siegel says, "..we can see them (dividend stocks) at a permanent high" moving forward. Wow, that really has an Irving Fisher feel to it. Just before the Great Crash in 1929, Irving Fisher, noted economist, said, "Stocks have reached a permanently high plateau." History often rhymes. Perhaps today, unwittingly, with his 16K Dow call this year, also the call that the 10-year would never fall below 1.38%-1.39% again, and prediction that dividend stocks are at a permanently high plateau, Jeremy Siegel may have just called the top in the equities markets. What do you think? Perhaps the history books may read, Jeremy Siegel, noted economist and professor, in late April 2013, said that dividend stocks are at a "permanent high" level.
Good one about calling the top, KS--you are so right, "permanent high" is eerily similar to the famous 1929 quote, which Fisher to his credit later confessed was totally wrong.
ReplyDeleteHouston, we have liftoff in Rocket VIX. Let's see if it crashed back below 14 or reaches escape velocity.
''Houston, we have liftoff in Rocket VIX. Let's see if it crashed back below 14 or reaches escape velocity.''
Delete:)
no Sir.
First VIX in 9.5-10.5 after that the launch will occur :)
V.
''Jeremy Siegel may have just called the top in the equities markets. What do you think?''
ReplyDeletemight be, but I don't think that here is The Top.
as a matter of fact between Fisher's opinion and the market demise 3 to 4 weeks passed...
end of May will be interesting, for sure.
V.
Oh KS, I have to correct what I've said.. it was a matter of days , not weeks between the moment of Fisher's affirmation and the market crash ....
Deletecheck it out....
http://www.gold-eagle.com/editorials_01/seymour062001.html
V.
Jeremy Siegel was bullish ("2008 Economic and Market Forecast") just before the crash. He didn't see any problems with mortgages or foreclosures and he assured his gentle readers that friendly bankers would help anyone running into difficulties. He forecast stock market gains for as far as the eye could see.
ReplyDeleteHe also dipped his toe into politics and predicted Hillary Clinton would be elected president in 2008.
Jeremy is a frequent guest on CNBC, where his message is a perfect fit.
The sad thing isn't so much that shills like Jeremy can sucker people into doing foolish things with bad predictions but that they can resurface to do it over and over and over again.
ReplyDeleteAbby Joseph Cohen is another one. She appeared somewhere the other day with her "buy, buy, buy" GS message.
Great comments by all, and sadly, all true. In general, prior to the 2008 crash, all those same faces on television were bullish and telling everyone to buy. They are always bullish since their main purpose is to bring funds in. So people tend to invest more with a happy guy telling them he can provide fun rather than a guy who is not. The television personalities are cheerleaders since the sponsors that buy the television ads want to hear all positive talk. So they enable each other. Everyone has a master; always follow the money and it tells you the reason behind most everything.
ReplyDelete