The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Up and down
Futures rallied with European trading today and the S&P 500 opened about +35 points. The dip-buyers seemed to agree that today was going to be the response to the prior two sessions. A favorable ruling for Alphabet sent that stock up 8-plus percent, which contributed greatly to the upward move in the market. Economic data wasn’t very influential and the usual narratives remain intact. Yields fell across the curve, which helped the stock bulls too. The tape topped out around 11 AM and gave back almost all the gains from the morning. The tape caught a quick bid late though. Capital flow was about normal at 99%.
If yesterday and Friday were run-of-the-mill dips, one would have expected the dip-buyers to have ripped the tape higher with gusto. It’s uninspiring for the longs to push early, fail midday, and kinda recover late. The bulls didn’t snap the necks of the bears. It certainly doesn’t look like shorts were trapped either. Perhaps there weren’t any shorts out there though? They’ve been filleted for so long, they probably aren’t going to show up in force just below all-time highs.
Today’s technical drama is a bit interesting but I continue to believe that the significant market move will be Friday. Some actors are playing chart-games for sure right now. Some of the bolder believers are probably front-running the nonfarm payrolls release and investors flows projected for the rest of the month. I don’t think those early-actors are too influential right now.
I think the bulk of the pros and retail are happy to earmark their latest slug of cash for buying *after* Friday’s data.
It wouldn’t surprise me if that money is destined to buy, even if the numbers are bad.
Maybe data tomorrow, like ADP or weekly jobless, can shake some of that capital into stocks early but I doubt it.
If the nonfarm data is unsurprising , I think we get high volumes and new highs on Friday.
See you tomorrow.
-Mike
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