The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
No enthusiasm.
While the market opened positively, it rolled over quickly and the S&P was flat-to-down from the morning on. News wasn’t material as the market remains partially paralyzed by the 2-week time horizon for negotiations before President Trump ultimately decides whether to bring US force to bear. As such, stock market investors aren’t running for the exits but they have no enthusiasm to lift offers and continue the rally either. Treasury yields dropped small today, perhaps signaling increasing appetite for safety. Capital flow (140%) was relatively light during the session but increased into the close. Today was monthly option expiration plus futures settlement, which probably explains the pattern.
The drop in the index was quite small today and the bears barely won the week as well. Despite the geopolitical headlines, the market is not very upset. This also explains the lack of upside continuation from the April bounce. Investors may want to follow the chart higher. They probably also agree that the market should go higher. They just cannot, or will not, drive it higher with the precarious state of things in the middle east. It feels very much like investors are going to wait for a meaningful headline before acting in size.
That means no volatility for a while and then some huge reaction to a headline. It could be either bearish or bullish. There’s no implication for direction at the moment.
Have a great weekend, see you Monday.
-Mike
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