Tag Archives: market lab report

Market Lab Report – Premarket Pulse 3/23/16

Major averages finished roughly flat yesterday on slightly lower volume as the NASDAQ Composite approaches its 200-day moving average. The market’s resilience yesterday in the face of the terrorist attacks in Belgium speaks, in general, to the power of the quantitative easing manipulations by central banks, and also to markets that are less sensitive to this type of news which is usually small in scope with respect to stocks and economies. The markets even quickly recovered their losses that came in the 9/11 aftermath by rallying off lows for a few months, as such attacks do not attack the heart of economies. That is left up to the Fed and other central banks, political entities that they are. Indeed, the economic patient has heavily clogged arteries but the Fed keeps giving the patient morphine and band-aids. However, the market rally off the February lows has become extended and is entitled to some consolidation. We would simply advise keeping an eye out for more objective signs of a potential rally failure. The first sign of this, from a material standpoint, would be downside stops being hit in our current long ideas.

Market Lab Report – Premarket Pulse 3/22/16

Major averages rose fractionally yesterday on lower volume that was well below average. Economic news was scant. This was a quiet, uneventful day for both US and global markets which appears to be the calm before the storm as Brussels, Belgium was attacked. 13 people have been reported dead. Futures are consequently lower by about -0.5%. With the indexes in an extended position as the S&P 500 approaches its prior December highs and the NASDAQ Composite approaches its 200-day moving average, a pullback is not to be unexpected. Today’s terrorism news out of Belgium gives the market an “excuse” for a pullback, but investors should be watchful in the event it turns out to be something more substantial. Long positions taken as a result of recent pocket pivots should be kept on a tight leash as risk-management becomes a priority during any market pullback, whether “normal” or not.

Market Lab Report – Premarket Pulse 3/21/16

Major averages finished up Friday on higher volume due to triple witching options expiratioon. Central banks around the planet continue their easy money policies as major indices approach old highs. The S&P 500 sits just 4% away from breaking into new high ground, and a few new actionable pocket pivot buy points emerged.  A confluence of events have caused the rally off the February lows: higher oil prices even though trade agreements for an output freeze have yet to be struck; American Association of Individual Investors (AAII) sentiment at bullish lows even below the lows of the early 2009 market bottom; and central banks pledging to keep rates as low as possible. The rally has caused a spate of short covering which, in turn, has pushed the markets higher. How much further can this rally go? It will come down to the question of whether a loss of confidence in quantitative easing which has failed to spur global growth will overtake the easy money which has to flow somewhere. Indeed, it is likely to continue to flow into equities and hard assets as bonds remain a poor option. Perhaps the saying “Don’t fight the Fed” has never held more true especially as a whole gang of central banksters align themselves to keep rates as low as possible. But as we saw in 2015, this does not necessarily mean a strong uptrend. Instead, it could mean continued elevated levels of volatility while the tug-o-war plays out, which, if the many years of backtesting and more recent actual real-time trading are any guides, can be a close friend to the VIX Volatility Model.