Last week on the first day of the second quarter, stocks jumped higher closing up slightly under 1% after opening the day flat. Chinese manufacturing data jumped over the same weekend and US manufacturing data also had a similar rise then, helping to lead markets higher. Everything look so rosy throughout the week and not much was in the way of higher highs - even had me convinced.
Then on Friday morning (4-6) we got a nasty surprise as the NFP came in at a MUCH lower number than the worst scenario the Government was expecting. It is a good thing the NFP happened on Good Friday when the markets were closed as it would have turned the market place upside down and into a real disaster. As it was, the 500 dropped 21 points in a few minutes but recovered 3 points during the 45 minutes the futures were open after the NFP report as I wrote in this report. Follow up:
The Asian/Pacific markets closed down across the board. India, Japan, South Korea and Taiwan dropped more than 1%. Europe is closed today. Let's hope this market correction is in shallow waters as the sinking SP500 flounders.
If we do get an unlikely 2% sell-off today (from Thursday's close 1398 = -28 points), you will still see a lot of 'dippers' snapping up shares at S&P's 1,367 area. The surprise is when it continues to fall 4 or 5%. (-60) to 1338 which coincides with the support at the 1340 area. I suppose the 'dippers' will again jump in and buy that dip too.
What I am expecting is that the markets will fall further this week as some of the green volume decides it was a mistake and sells driving an already depressed market further down. Today the markets will probably rise because there are no economic reports today.
When the dusts settles, maybe as low as 1300, I'll step in and buy - cash is king!
Bloggers and financial strategists who thought the economy and earnings couldn't grow enough to justify the S&P reaching 1,428 were probably correct. Right now I am eagerly setting up my buy list.
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More after the opening.
Written by Gary