Market Lab Report – Premarket Pulse 9/25/15

By | September 25, 2015

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Major averages fell yesterday on higher volume though closed in the top quarter of their respective trading ranges. Federal Reserve chairperson Yellen gave a speech after yesterday’s close. “Prospects for the U.S. economy generally appear solid” and signs of weak growth overseas won’t prove large enough to have a significant impact on policy, noted Yellen. Futures are consequently higher by more than 1% at the time of this writing as her words soothed worries that the US economy could get pulled down with the problematic global economy. That said, when major world economies tumble, it always has affected other major economies. The US is no exception. So while China’s troubles could spill over into the US, major market tops can take months to form. Thus in answer to the question of whether one should short at the close given problems in China because they believe markets are heading lower, the market remains in a highly volatile gap-up, gap-down state with various forms of manipulation still present. Thus one takes ample risk of putting on a new position at the close in the hopes of a gap down the next day. The odds are better in buying or shorting the right stocks at the right time as a number of such stocks have been nicely profitable this year, rather than trying to get “cute” with the market by trying to predict gap downs at the next day’s open, as this is often news driven. This morning’s sharp gap-up coming immediately on the heels of yesterday’s sharp gap-down provides a case in point. Scalper1 News

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