- Details
- Written by Dr. Duke
- Category: Dr. Duke's Blog
- Hits: 2160
Buoyed by favorable earnings from JPM before the open and better than expected retail sales, SPX opened higher, but then fell out of bed, trading down to $2083 before recovering late in the morning. SPX managed to hang onto a modest gain of $3 into the close at $2096. RUT traded flat, closing at $1265, down about twenty cents. The VIX fell back only about 0.2 points to close at13.8%. Trading volume in the S&P 500 was unchanged at 1.8 billion shares. But trading volume was up 7% on the NYSE and was also up on NASDAQ, but only marginally at +2%.
Retail sales came in at a gain of 0.9% for March, a big improvement over February's 0.5% decline. The Producers Price Index (PPI) rose 0.2% in March, up from last month's 0.5% drop.
This market wandering is doing wonders for my condors; the May position is up 13% and the June position is already up 5% even though we still have 65 days until expiration. We were able to open the June position early because we closed April early and freed up capital.
Get your black arm bands ready for tomorrow...
- Details
- Written by Dr. Duke
- Category: Dr. Duke's Blog
- Hits: 1854
The bulls were still in charge this morning as the market opened, but they lost their "mojo" around 10 am ET, and the market just steadily traded off the rest of the day. The end result was to give back essentially all of Friday's gains. SPX closed at $2092, down $10; this is right at the $2090 support level, but really just in the middle of the larger trading range from $2040, the low from mid-March, and $2120, the high set in late February. But RUT was a somewhat different story; it traded off its intraday high at $2172, but managed to close up one dollar at $1266. Volatility was quick to react, with the VIX gaining 1.4 points, closing at 14.0%.
There was some weak economic data out of China, suggesting a slowing of that economy, but no significant U.S. economic data was reported today.
Trading volume fell off today with 1.8 billion shares of the S&P 500 trading. Trading volume declined 6% on the NYSE, and only rose 2% on NASDAQ. Perhaps traders are awaiting the earnings announcements from J.P. Morgan and Wells Fargo tomorrow morning. So much news has been made about the ill effects of the strong dollar, that one is tempted to predict it was overkill, but we'll see. One of the problems with contemporary journalism is that original thought is rare.
- Details
- Written by Dr. Duke
- Category: Dr. Duke's Blog
- Hits: 1736
I noted yesterday the apparent trading channel of $2040 to $2090 for the SPX. The bulls pushed the market higher today and SPX closed up $9 at $2091. So SPX is right at that resistance level that has been so resistant for the past few weeks. But RUT pulled back $4 to close at $1259. So I am not convinced we have seen a break-out just yet. An open and close above $2090 tomorrow would be encouraging, but the true confirmation of the bullish trend continuing would be a break-out to a new all-time high above $2117. Some of the large banks and Goldman Sachs will be announcing earnings next week. Perhaps that will give the bulls the ammo they need to push higher. We'll see.
Watching the market trade higher on increased volume would be a bullish sign - one that didn't occur today. Trading in the S&P 500 stocks was flat with yesterday at 1.9 billion shares, below the 50 dma. Trading volume was flat on the NYSE and only increased 3% on NASDAQ. Traders are not concerned about the bottom falling out anytime soon; the VIX dropped another point to 13.1% today.
The weekly unemployment claims report was a mixed bag today. Initial claims rose 14 thousand to 281 thousand, while continuing claims dropped 23 thousand to 2.3 million. No significant economic data is due out tomorrow; will it be a slow day in the markets or will it surprise us? My guess is that traders will sit on the sidelines waiting for the earnings announcements scheduled for next week.
- Details
- Written by Dr. Duke
- Category: Dr. Duke's Blog
- Hits: 1989
SPX made short work of the resistance at $2090 by closing for the second day above that resistance set back in December but reaffirmed several times over the past couple of weeks. SPX closed up $11 at $2102 and RUT followed suit with a close at $1265, up $6. Volatility continued to contract with the VIX dropping another half point to 12.6%. In mid-March, SPX broke out above $2090 but was stymied around $2110, so that is the next resistance to be broken before tackling new all-time highs above $2117.
Trading volume was pretty flat today with 2.0 billion shares of the S&P 500 trading; that is slightly higher than yesterday but remains below the 50 dma at 2.2B. Trading volume was down on both the NYSE (-7%) and NASDAQ (-12%).
As I explained yesterday, traders may be in a "wait and see" mode for now. Below average trading volumes seem to support that thesis.
My May iron condor on RUT stands at a net
gain of 12% today and my June iron condor on RUT is up 5%.
I'm off to start my weekend of working out in the yard for the first time this year. Unlike some of you, we are just starting to see some green sprouts. I wish you all a pleasant weekend.
- Details
- Written by Dr. Duke
- Category: Dr. Duke's Blog
- Hits: 2121
SPX displayed some extreme volatility just after the FOMC minutes were released this afternoon, but then it settled to about where it was before the announcement. SPX closed at $2082, up $6. RUT traded up $9, closing at $1263. Volatility dropped almost a full point with the VIX closing at 13.98%. Trading volume was modestly higher with 1.9 billion shares of the S&P 500 stocks trading. Trading on the NYSE was up 10% and volume was up 7% on NASDAQ.
SPX is locked in the trading channel from $2040 to $2090. One could place the upper end of the range at $2120, the high from early March, but resistance at $2090 is proving strong; SPX has been unable to hold $2090 several times over the past few days.
Many Fed observers were anxious to understand from the March minutes why the FOMC removed the adjective, patient, from the announcement discussing timing of the expected interest rate hikes. I think they were disappointed. It seems that the committee simply wanted to be free to address that question at each meeting based on the data. Once again, trying to read the tea leaves proved frustrating.
Alcoa reported mixed results on earnings after the close with the stock trading down a bit after hours. Perhaps most significantly, Alcoa raised their forecast of global aluminum demand from +7% to +9%. That is an encouraging economic data point since aluminum is used in many different industries.
Tomorrow brings the latest unemployment claims data; we don't have any significant economic data due for the balance of the week. The earnings reports more likely to move the markets begin next week with J.P. Morgan, Goldman Sachs, and others.
