In spite of all the fashionable buying today, our outlook over the next week or so isn’t particularly bullish, and here are some reasons why: Historically, it is really uncommon for the market to move up 2% the morning before a Fed announcement… …and in general, these big Fed rallies tend to end either in boredom or in tears over the following several trading days. Over the past decade, these kinds of flashy rallies have been sustained less than…
Sunday, May 11, 2008
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The S&P 500 is sitting right at the trendline that extends from the March lows, and is also right at the 20DMA, which is a reasonable place to be after drifting above that moving average for the past couple weeks. Market internals suggest that this pullback may be about finished, providing a setup for some further upside; breadth and on balance volume improved on Friday. At the same time, options sentiment is still bearish, and a few technical indicators (CCI,…
Monday, April 28, 2008
This week should be pretty volatile, with plenty of government data, earnings announcements, and Fed action to push markets to and fro. Many traders are paying special attention to the GDP announcement Wednesday morning and the FOMC news later that afternoon. As is our wont, we advise taking off some risk ahead of Fed meetings. Markets were very quiet until the last forty-five minutes today, trading on very light volume, and the S&P 500 emini futures weren’t able to…
Thursday, April 24, 2008
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Some quick thoughts tonight: 1. The VIX dipped below 20 intraday for the second time this year. The 1-month VIX continues to head lower relative to the 3-month VXV, and the more stretched this ratio gets, the more bearish that reading is for stocks. The funny thing about volatility readings is that they’ll tend to drift lower, and then spike up suddenly. We’re due for a jump in the VIX – maybe not now, but soon. 2. Lots of resistance…
Tuesday, August 5, 2008
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