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The S&P futures were positive early this morning, and the markets opened higher, but then immediately reversed. It was looking as though we were breaking down to new lows. But then it recovered, and by the end of the day, SPX had tacked on $26 to close at $2021, near its intraday high. RUT followed suit, closing up $10 at $1176. Volatility pulled back by a point and a half, with VIX closing the day at 19.4%. Trading volume was down a bit with 2.5 billion shares of the S&P 500 trading, but that remains well above the 50 dma at 2.2B. Trading volume decreased 13% on the NYSE and declined 11% on NASDAQ.
The ISM manufacturing index came in at 55.0 for January, flat with December (55.1). Construction spending gained 0.4% in December after a decline of 0.2% in November.
Whether you are focused on the SPX chart as a sideways trading range with a floor at $1990 or a sideways wedge with a rising lower trend line around $1995, SPX dipped outside of that pattern this morning, but bounced nicely. I don't think we should do the happy dance just yet, but it is reassuring.
My Feb iron condor on RUT at 1070/1080 and 1300/1310 is now up 12% with 17 days remaining. Those put spreads are now 1.6 standard deviations OTM, which is reassuring given this market's weakness.
It seems as though I have been shoveling snow for the past 24 hours, but today was a beautiful day with blue skies and sun sparkling off the snow, and there is a low of snow. The official count was 17 inches. I can hear some of my friends down south now, but don't you miss the seasons? Hmm...
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SPX fell out of bed this afternoon and closed at $1995, down $26 and near its low for the day. RUT also dropped, closing at $1165, down $25. Volatility spiked upward with the VIX gaining two points to close at 21%. Trading volume was strong with 3.0 billion shares of the S&P 500 trading. Trading volume rose 10% on the NYSE and rose 6% on NASDAQ.
The first estimate of GDP growth for the 4th quarter issued today at +2.6%, down to almost half of third quarter growth. The Chicago PMI for January came in at 59.4, up from 58.8. The University of Michigan consumer sentiment survey for January reported 98.1, roughly flat with December. This data doesn't seem to explain the severe sell-off today.
SPX is still holding support, but is certainly looking weak. Based on the commentary from CNBC guests, it appears as though more and more analysts are throwing in the towel. If you draw the upper and lower trend lines on the SPX price chart, you get a classic wedge, and today's close is sitting on that lower trend line. This chart pattern can go either way, bullish or bearish, with a break-out through one of the trend lines. Monday's open will be interesting.
The January Barometer of the Stock Trader's Almanac is officially complete with a bearish prediction for 2015. SPX opened January at $2059 closed at $1995 today. It isn't a pretty picture. My Feb and Mar iron condors on RUT are both in the black, so that was a comfort as I watched this market tank today.
Forget this market ugliness and enjoy your weekend.
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The markets were chopping sideways today, but the Fed announcement sent stocks lower. SPX traded off strongly in the last hour of trading today, losing $27 to close at $2002. RUT also traded off $20, closing at $1175. Volatility jumped in that last hour, with VIX closing the day at 20.4%, up over three points.
Trading volume spiked higher with 2.7 billion shares of the S&P 500 trading today. Trading volume rose 22% on the NYSE and rose 10% on NASDAQ.
Oil traded lower and the dollar continued to strengthen. This is fueling some concerns about currency effects on multi-nationals in coming weeks. But those effects didn't seem to hold back AAPL's performance. Did you see those iPhone sales numbers? It made me wonder what's wrong with me since I still have my iPhone 4s. Apparently everyone is trading up and I am two upgrade cycles behind.
It seemed as though the FOMC announcement spooked the markets, but it isn't obvious to me if that was really cause and effect. The Fed continues to emphasize that it will remain patient about raising interest rates, and the Fed's latest announcement appeared to strengthen their assessment of the economy. It seems that traders remain wary of a global slowdown and its effects on this economy. One thing's for sure - this is a dicey market to trade.
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The markets continue to wander aimlessly. SPX opened this morning and traded down to $1989 before bouncing around 1 pm ET and rising steadily into the close at $2021, up $19. RUT also rose $15 to close at $1190. Volatility backed off a bit with VIX closing down 1.4 points to 19.0%. Trading volume flattened out after yesterday's spurt higher, with 2.6 billion shares of the S&P 500 company stocks. Trading volumes both on the NYSE and NASDAQ declined 1% today.
Initial unemployment claims were reported this morning at 265k, down from 308k. Continuing unemployment claims also declined from 2.46 million to 2.39 million. One might have thought this was good news, but the markets didn't seem to be impressed, as the market opened and traded down all morning. I'm not sure what changed this afternoon, but this degree of intraday price volatility has become routine.
We are in the midst of earnings season, and thus far, about 70% of reporting companies have beat estimates. If that continues, perhaps the market will strengthen. The stronger dollar has many analysts expecting poor earnings results from multi-nationals due to currency exchange losses.
Today's price action on RUT broke out above the 50 dma, but SPX remains about 25 points below the 50 dma at $2046. Both my Feb and Mar condor positions on RUT remain in the black. It is looking like the January Barometer of the Stock Traders Almanac is going to turn in a bearish indicator unless something dramatic happens tomorrow.
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Weak guidance comments in the earnings announcements of CAT and MSFT, plus a larger decline in durable goods orders spooked traders this morning. SPX opened down about $10 and within an hour or so, the losses had widened to about $35. SPX traded as low as $2020 before beginning to recover, closing at $2030, down $28. RUT closed at $1195, down $6. Volatility bounced up a bit, but not as much as I would have predicted, with the VIX closing up two points at $17.9%. Suddenly everyone is a bear.
The durable goods orders report for December dropped 3.4%, worse than the 2.1% decline in November. But other reports today were more positive. The Case Schiller housing price survey came in at +4.3% for November, down a bit from the previous reading of +4.5%. Similar to the University of Michigan numbers, the Conference Board's consumer sentiment survey hit a high note of 102.9 for January, the highest report since August of 2007. The annualized rates of new home sales for December came in at 481 thousand, up from the previous 431k.
AAPL and YHOO were both trading higher in after hours markets after their earnings announcements; maybe that will improve the moods on the street tomorrow.
My Feb iron condor on RUT continues in the black with a net P/L of +13%. We sold the AAPL 97/102 and 120/125 iron condor on AAPL in our trading group today as a play on the earnings announcement. So far, so good...
