Job Losses Not Expected? Overreaction? Overnight futures were up and then the gains evaporated after the 8:30am (ET) release of the initial jobless claims. While huge job losses were expected, looks like the markets are reacting to the much higher than expected/feared magnitude of the job losses and their stoking of the fears of recession (more…)

Real Market Sentiment to Reveal Itself Today! As many veterans on the markets have been referring to, the last few days of “bounce” in the markets could be mainly driven by the quarter-end portfolio asset allocation re-balancing (back to 60/40 equity/bond model). Some part of the “window dressing” flows could also have propped up the (more…)

Quarter-end Window Dressing or Moral Hazard? The well known quarter-end “Window dressing” by funds and institutional advisors could put artificial pressure to the upside on the markets today. At the same time, since the quarter is anyway big negative one, could it also spark funds to dump losers and/or rotate into “wish list” stocks that (more…)

Advantage None Our models have rejected the daily close above the 2510 level last week and are looking for a daily close above 2560 today to turn mildly bullish. The short term bottom might be in at 2191.86, possibly until the earnings season kicks in in a couple of weeks, but there is no directional (more…)

Choppy, Widened Trading Range Our models have been looking for a daily close above 2510 to adapt a short term bullish bias, which we got yesterday as anticipated but the models are ignoring it now and looking for another daily close above 2510 on Monday for them to turn mildly bullish. The short term bottom (more…)

Shorts Beary Confused? Looks like the traders who were betting on the short side are trapped in the sustained upsurge in the markets, thanks to the fiscal stimulus bazooka and the Fed’s aggressive moves. Even today’s 3.28 million initial jobless claims do not seem to dent the market sentiment (at least not yet), as the (more…)

Short-term Bottom In, Or a Selling Opportunity Unfolding? The fiscal bazooka is now (almost) official! The overnight futures have gone through a wild range with the volatility ticking up. Is this going to be another “buy the rumor, sell the news” or is it a great buying opportunity? Investors seem to lack conviction while hedge (more…)

Is the (short-term) Bottom In, Yet? The markets have breached the levels from Trump’s Inaugural Day, 01/20/2017 (at 2271.31 on S&P 500 and 25516.83 on the Dow) yesterday and, as anticipated, the administration seems to be going all-in to defend those levels bringing out stimulus bazookas. We wrote yesterday morning, “In this election year, it (more…)

Can Trillions of Dollars Improve the Market Sentiment? The overnight index futures have dropped 5% and hit the “limit down” overnight, but have recovered by early hours and are pointing to potential gains today. The markets are testing the levels from Trump’s Inaugural Day, 01/20/2017 (at 2271.31 on S&P 500 and 25516.83 on the Dow). (more…)