Futures are up sharply this morning in a continuation of Friday’s massive reversal. Stocks ended the week higher as we welcome the last week of trading in the month of March.
If markets continue to roll higher following the nice reversal on Friday, we’ll be looking to 4100 on the ES futures to be tested on the upside. Nasdaq has been firming as well, the 13K level on the NQ futures has been strong resistance.
Silicon Valley Bank assets were sold for a discount today, perhaps easing some fears over the recent banking crisis.
It’s a rather quiet week for earnings this week, today we’ll hear from Carnival and PVH.
The only real event we see is the end of the month and quarter, which can see some very big moves up and down. Don’t forget the window dressing (buying into the end of month) which often comes with a drop in volatility.
Breadth is now on a sell signal, though Friday saw a big turnaround from negative to positive. That is notable.
Volume trends are moderate to lackluster, following the prior week’s big expiration. We seem to be finding the dip buyers very active, this week especially. Friday was an impressive turnaround, high volume selling at the outset followed by bargain hunters stepping in to push the markets towards their highs of the day.
We still see 4K on the SPX and then 4100 as significant resistance. On the downside, 3900 clearly is good support and below there we have 3850.
What’s it mean?
A strong turnaround Friday, but we had clues early on this could happen. What were they? Notice the VOLD was not hit hard with a big down open, the selling conviction was not there. Also, the VIX decline started early and held up all session long, volatility sellers with no fear coming into the weekend. Lastly, the ADSPD was not signaling a trend down day, in fact made its low early and rallied hard. It’s rather unsettling, however this is how bull markets get started.
- Monday: N/A
- Tuesday: Retail inventories, consumer confidence housing data
- Wednesday: Mortgage apps, oil inventories
- Thursday: Jobless claims, GDP estimate for Q4
- Friday: PCE, Michigan sentiment survey
Earnings this week:
- Monday: CCL, PVH
- Tuesday: CONN, MKC, LULU, PLAY, MU, RH
- Wednesday: CTAS, PAYX, SMTC
- Thursday: EVGO, BB
- Friday: N/A
Fed Watch: Fed speakers are out this week. Fed futures continue to look for massive rate cuts coming later in 2023, quite a stark difference from what the Fed has been saying.
Issues/Stocks to Watch
Still unresolved, this banking crisis remains a hindrance to the markets.
MU – Micron earnings are going to be watched closely as the chip sector has made a huge leap forward.
End of month/quarter buying that often happens with some vigor.