Guessing Is Over, The Market Is Down

March 19th, 2012
in Gary's blogging

Friday I wrote an article on "Any One Else Left Guessing What Monday Has In Store For Us?" as I didn't have a clue what the near-term has for traders. I should have guessed realistically that there wouldn't be much of any change and the pre-market today (Mon 3-19) looked just like several sessions just behind us, low volume and with small opening moves either up or down. What is going to happen for the rest of the session is the current guessing game.

Leavitt has some words of wisdom for us today which I find interesting. he also mentions that, possibly, the $RUT could break out and the markets then correcting; that would be an interesting event. Evidently, he isn't expecting any drastic moves before Friday when options expire. I am not so sure Mr. Market is going to be so predictable as I sit on the edge of my seat waiting for a breakout - one way or the other. His observation on the Russell 2000 index is a good one as the large caps won't climb any higher until the $RUT does.

@leavitt: "The Russell remains sitting just below resistance.

Many of the breadth indicators I follow, which had been moving down as the indexes moved up, are now moving up. So it appears the market corrected with time, not price.

The market has had many opportunities to drop, but it hasn’t. It has climbed the proverbial wall of worry. With so many indicators now pointing up, it would be very fitting if the Russell broke out, and then the entire market corrected. I’m not predicting this, but this is how Wall St. works.

In a correlated market, when the indexes slowly move up, almost all stocks will do the same. In a non-correlated market, when the indexes slowly move up, many stocks will rally much more and many stocks will pull back. Because of this you can’t cite the movement of the indexes as a reason to stay in lagging positions.

The market could have sold off after the employment data. It did. Then it could have sold off after the FOMC. It didn’t. Now it has a chance to sell off after options expiration. (This Friday) We’ll see what happens."

Today the premarket opened around the close of Friday and eased down to -20 for the DOW,  -3 for the 500, 57.90 for SSO and 140 for SPY. Gold is at 1655, SLV at 31.61, WTI oil moving up at 107.85 and Brent also easing up at 125.35.

The opening finally broke any suspense that anyone might have had with the DOW down at 13224, the 500 down at 1403, SSO down at 58.05 and SPY down at 140.19. It is a flat market with the lowest opening volume of any previous session I can remember. It could easily go in either direction today. There is only one report this morning at 10 am for the USD NAHB Housing Market Index (MAR) and that is considered low and I don't consider that a market mover. Tomorrow, there are medium reports for Housing Permits and Housing Starts at 8:30 am., those might make a difference providing the numbers are above expected of 686K and 700K.

So unless there is some sort of European market news that can move markets I suspect we will see a flat to small negative movement day with low volume again.

Written by Gary

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