The Fuse
Futures are sputtering this morning as we make our way towards the long weekend. Volatility is up in anticipation of some big movement to end the week, however markets are closed Friday.
The SPX 500 closed exactly at 4100 yesterday, not a surprise as that level is attracting some interest. Buyers ran out of fuel Tuesday and a pullback towards 4090 is a bit more interesting. Oscillators are mildly overbought, the R2K has been weak for several days and usually leads.
Not much on the news front overnight but yesterday we saw gold soar past 2K an ounce. Silver also moved up sharply. Some important data out today includes the PMI and ISM services along with ADP.
Nothing much on the earnings front this week, a few small names but STZ coming out tomorrow.
We have the jobs report coming out on Friday, but of course the markets are closed that day in observance of Good Friday. We’ll have a slew of other economic data.
Breadth retreated but remains on a buy signal. Oscillators are well off the recent highs and may slide a bit more over the coming days, setting up a potential buy.
Turnover remains moderate as the start of the new month has new flows. We’ll see much more volume over the coming days with earnings season coming up quickly.
4100 on the SPX 500 now is good support, and just below there at 4090 and then 4040. We also now see 13K as strong support for the Nasdaq.
The Internals
What’s it mean?
A bit of giveback here Tuesday with the VOLD getting hammered and the ADD showing extreme negative numbers. A break above 21 on the VIX has this indicator poised for more highs, the TICKS were demonstrably bearish yesterday. Some followthrough to the downside means a correction is imminent.
The Dynamite
Economic Data:
- Wednesday: ADP, services PMI, ISM services
- Thursday: Jobless claims
- Friday: NFP report, consumer credit
Earnings this week:
- Wednesday: CAG, SCHN
- Thursday: STZ, LEVI, WDFC
- Friday:
Fed Watch: A few fed speakers out this week but we will be watching the fed funds futures carefully, as they now portray a 50/50 chance of a hike at next month’s meeting.
Stocks to Watch
Apple – strong week and month, they declared a new WWDC coming up in June.
Crude oil – we could see a drop in crude as Japan now decides to buy Russian oil above cap levels.
Volatility – This has been crushed lately, probably too low and we could see a rebound soon.