The market is hanging in there in early trading, following Friday's selloff and Asian markets being down significantly overnight. China was hit especially hard, down -5.1%.
Despite Friday's selloff, last week still showed a bounce from the previous week's shellacking. The S&P 500 rose +2.23% last week, and the Nasdaq 100 recouped +3.12%.
The euro remains the primary story. Overnight, it fell to a 4-yr low vs. the dollar, but it has since bounced from those levels. The gain in the dollar is weighing on oil again, which is approaching $70.50. Gold is higher again, up another $8 to $1235.
This morning, Bank of America reported that credit card defaults in April rose slightly, while total delinquencies were down from March levels. Separately, the Empire State Manufacturing Survey fell to 19.1 from 31.9 last month.
Among sector ETFs, consumer staples (+0.8%) are leading the way, followed by industrials (+0.18%); energy (-1.46%) is the weakest, followed by financials (-0.52%).
The 10-year yield is a bit higher to 3.45%; and the VIX is hovering near the 31.34 level after Friday's sharp spike higher.
Trading comment: The markets feel calmer today, but I am surprised that the VIX isn't falling. I have not reviewed my sentiment indicator roundup from last week, but I hope to see an increase in bearishness to help put in another trading bottom. We are roughly 2 weeks into this current selloff, so in terms of time, I think we still have more to go. Corrections often take 4-6 weeks to run their course, although the timing can vary.
Technically, the S&P is kind of in no-man's land, floating halfway between its 50-day and 200-day moving averages. Soon, the 50-day looks like it will begin to slope downward, which has a way of acting like stiffer resistance if and when we get back there. Thus, I'm not ready to get aggressive, preferring to bide my time.
long BAC
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