Courtesy of John Nyaradi.
Major U.S. indexes and ETF close mixed on low volume day, stuck at significant resistance.
Major indexes and ETFs hovered near significant resistance, still unable to move higher as technical indicators point to lower prices and fundamental news was mixed with fears of a slowdown in China offsetting better news from Europe.
West Texas Intermediate Crude Oil declined 0.7% to close at $106.60 while gold dropped -0.6% to $1702/oz and silver dropped 1.25% to $33.71.
On a technical basis, all three commodities remain above their important 50 day moving averages.
The weakness was attributed to a larger than expected trade deficit report from China that would indicate reduced demand for its exports and the potential for a slowdown in China and the rest of the world.
VIX (NYSEARCA:VXX) dropped 8.6% today as major stock indexes were mixed to close mostly flat.
In spite of significant headline risk remaining in Europe and a slowing global economy, market participants are reaching near record levels of complacency as measured by VIX. Typically, levels like these are followed by a rally in VIX and a decline in stock prices and so it’s quite likely that a major market top is at hand.
Today the S&P 500 (NYSEARCA:SPY) the biggest ETF, was flat and closed below recent resistance levels.
The Russell 2000, (NYSEARCA:IWM) declined -0.2% and is still off its recent highs set in early February.
NASDAQ 100 (NYSEARCA:QQQ) gained +0.05%.
Dow Jones Industrial Average (NYSEARCA:DIA) was the best performer on the day, up 0.24%.
Tomorrow is a big day with the Federal Reserve meeting, and economic reports for retail sales and job openings.
Bottom line: Markets will not stay in neutral forever. The longer this sideways channel continues, the more explosive, up or down, the breakout will be.
Click here to learn more about John’s book and for a free membership to Wall Street Sector Selector
