- Details
- Written by Dr. Duke
- Category: Dr. Duke's Blog
- Hits: 2150
The markets continued their climb higher today. SPX gained $7 to close at $1993. RUT tacked on $10 to arrive at $1076. Volatility continued to contract with VIX losing 0.4 points to 16.7%. Trading volume was slightly higher with 2.8 billion shares of the S&P 500 companies trading today. Trading volume on the NYSE was up 9%, but trading volume on NASDAQ was only up 1%.
Initial unemployment claims came in at 278k, essentially flat with last week's 272k. Continuing unemployment claims were also flat with 2.257 million, slightly higher than last week's 2.254 million. Factory orders increased 1.6% in January, up from the 2.9% decline in December. The ISM services index was flat for February at 53.4; January's number was 53.5.
The jobs report comes out before the market opens tomorrow. Will it matter to this bullish market?
I'm in Orlando for the Money Show. I have been impressed by the quality of the speakers. I recommend you check out the next Money Show. I have learned a lot over the past two days. If you are in the neighborhood, send me a note; we can meet, share a coffee, and discuss this market.
- Details
- Written by Dr. Duke
- Category: Dr. Duke's Blog
- Hits: 2293
The futures were up about $10 when I first checked them early this morning, and the market did follow through with a positive open. Often those positive opens are met with selling, but not today. The markets just kept on pushing steadily higher all day with SPX gaining $46 to close at $1978. RUT gained $21 to close at $1054. SPX rose 2.4% today; RUT rose 2.0%, but the NASDAQ composite rocketed higher by 2.9%. Trading volume was higher across the board today with 2.9 billion shares of the S&P 500 stocks trading. Trading rose 4% on the NYSE and increased 13% on NASDAQ. Volatility made a huge move today with the VIX dropping almost three points to 17.7%. Where did those bears go?
Construction spending increased 1.5% in January, a nice improvement over December's +0.6%. The ISM manufacturing index came in for February at 49.5, up from January's 48.2.
It appears this positive economic data finally broke the pessimistic hold the bears had on the market. SPX has finally decisively broken resistance at $1940 from January 29th. Over the past week, SPX has flirted with that level, closing alternatively above and below $1940. But today's run was decisive. But I'm not betting on a strong bullish run to new highs. First of all, the economic data aren't that great, and secondly, this presidential election is giving many traders the jitters. Socialism used to be a bad word...
- Details
- Written by Dr. Duke
- Category: Dr. Duke's Blog
- Hits: 2168
User Rating: 5 / 5
The various headlines I have used over the past 12 to 18 months to describe these wild roller coaster rides in the markets are getting old. Wild reversals are now almost commonplace. SPX traded down as low as $1891 today before reversing to close at $1930, very close to its high of the day. RUT outperformed SPX, trading up $10 to close at $1022. Trading volume popped up with 2.7 billion shares of the S&P 500 stocks trading. Trading volume rose 12% on the NYSE and increased 13% on NASDAQ. The VIX ran higher this morning but then pulled back to close at 20.7%, down 0.3 points.
New home sales declined in January to an annualized rate of 494 thousand, down from December's 544 thousand.
It appeared as though oil prices drove today's stock market, lower at the open and then reversing higher. But the transition wasn't smooth; the correlation is unraveling.
I continue to find the speculation about another 2008-type of market crash surprising. It doesn't seem to occur to anyone that we are missing a stimulus like the huge subprime mortgage disaster that drove that crash. The doomsday gurus speak of banks holding too much oil related debt. That seems unlikely since the Fed have tightened up all of the reserve requirements significantly since 2008. That is part of the reason you cannot get a mortgage today. One analyst on Fast Money today was matching the shapes of the last several months of the price chart to the time just before the 2008 crash. He thought the matching shapes of the charts were predictive even though there is no comparable economic trigger for a crash today. Consider the 2000 bear market. It was driven by the dot com bubble. The 1987 crash was purely a price correction from very high price multiples. None of those conditions exist today.
- Details
- Written by Dr. Duke
- Category: Dr. Duke's Blog
- Hits: 2321
SPX opened higher this morning and traded up to $1958, but then started a steady decline and closed at its low for the day - not a good sign. SPX closed down $16 at $1932 and RUT lost $3 to close at $1034. SPX reached $1940 on 1/29 after hitting the correction low on 1/20. Then SPX turned and set a new lower low on 2/11 at $1829. That is why many technical analysts were watching for the resistance at $1940 to be broken. SPX did indeed have three closes above $1940 last week, but it couldn't hold those levels today. Volatility tacked on almost a point with the VIX closing at 20.6%. Trading volume was up a bit with 2.7 billion shares of the S&P 500 trading today. Trading rose 0.6% on the NYSE but dropped 2% on NASDAQ.
The Chicago PMI issued its February report at 47.6, down from 55.6. Pending home sales declined 2.5% in January, down from December's +0.9%.
The jobs report will issue on Friday, but it seems early for the market to be stalling in advance of that report. Maybe the fundamental issue is that there aren't sufficient strong economic data to fuel a bull market. On the other hand, I don't think the data are weak enough to justify a bear market. Maybe the sideways thrashing back and forth will be the norm, at least until we get the elections behind us.
- Details
- Written by Dr. Duke
- Category: Dr. Duke's Blog
- Hits: 2293
SPX closed at $1946, up $28 and RUT gained $12 to close at $1022. VIX dropped over one point to close at 19.4%. Trading volume declined in the S&P 500 stocks with 2.5 billion shares. Trading on the NYSE dropped off by 12% and trading volume on NASDAQ declined 6%. Normally, these declines after option expiration would be expected, but Friday's trading volumes weren't dramatically higher as they usually are. Thus, today's small declines were also unusual.
No significant economic data were released today.
Today's close in VIX at 19.4% matches the previous low in VIX this year, on January 5th. This also places VIX at the bottom edge of its Bollinger bands. That sets up the possibility of VIX oscillating back to the upper edge of the Bollinger bands just as it did at the first of the year and also on the first of February. Or it could wander sideways for a while. Given the economic and political uncertainties, I doubt VIX will move much lower.
Today's close in SPX was about six points higher than the peak hit February 1st after bouncing back from the correction lows. So the first resistance level has been broken. Next is resistance at the 50 dma at $1950. Institutional traders will be watching that level closely.
