March 20th, 2012
in Gary's blogging
Leavitt had called it right yesterday as per the quote below. I questioned the $RUT breakout yesterday as legitimate because the large caps didn't move. This morning oil has moved down and gold has risen off its morning lows. The Euro is up and the USD is down, but off its morning lows. The Asian markets closed down all off more than 1% with only the Nikkie up 0.12%. The European markets are down over 1% with Germany (DAX) leading the decline at 1.43%
@leavitt: ". . . . . 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.
(Today:) "These are still my dominant thoughts because I’ve seen the scenario play out many times. The market climbs the proverbial wall of worry and ignores warning sign after warning sign, and then, when the stars align to support the next leg up, the market corrects. Be on the lookout."
Today the premarket opened down with the SP500 furture as low as 1394 and down to -64 for the DOW. All of the other indexes are off this morning starting with 57.85 for SSO and 139.91 for SPY which appears to be moving sideways correcting for the piercing of upper Bollinger Band. Gold is at 1649, SLV at 31.32, WTI oil moving down at 106.86 and Brent also easing down at 123.20 (and falling).
The markets opened lower as predicted by the premarket action with the DOW down at 13158, the 500 down at 1400.58, SSO down at 57.89 and SPY down at 139.98.
The mornings financial reporting shows Building permits advanced 5.1% in February versus 0.6% expected to an annualized 717K from a revised 682K and the Housing starts slipped 1.1% in February versus forecasts for a 0.1% rise to 698K from a revised 706K. The premarket did not react to this news but closer to the opening bell the markets made a slight trend to the positive side.
All eyes are on the $RUT (Russell 2000 opening at 829) and the DOW, so unless there is some sort of European market news that can move markets I suspect we will see a down market for the first 1/2 hour to 1 hour with light to medium volume. After that time we will be at the mercy of DaBoyz.
Written by Gary