Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
As I wrote late yesterday, the close was quite shoddy and usually that leads to a poor open. That said we are in a global market and what happens in Europe affects us. So in a quite volatile overnight futures session, markets were up a bit most of the night then spiked as Europe bounced back a bit today. People are pointing to Alcoa as a driver but “puuhllease”… it’s Europe.
As mentioned yesterday a down flush type of open would have set up a very nice low risk “trading” opportunity to the long side, but the market rarely makes it easy does it?
The obvious level now for the S&P 500 is a retest of the 50 day moving average (from below) at 1370. We were extremely short term oversold late in the day but the action was so awful at the close it was not really something to incite dip buying. So this morning we will begin to work off that oversold reading and we shall see how it goes from there. Whatever the case, volatility has picked up significantly and we might be returning to a lot of gapping up and down based on Europe (or earnings) this month. Nothing was of course solved overnight on the continent other than those markets turned down ahead of the U.S. and thus are even more short term oversold. Technical levels are going to be a bit less important right now as we see what the consensus is on Spain and the situation developing there.
On the calendar we have Janet Yellen speaking tonight and I’d be very surprised to not see a nod towards easy money policies, then Google earnings tomorrow and JP Morgan and Wells Fargo Friday.
Disclosure Notice
Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
