There isn't a lot of market moving news this morning. Asian markets were slightly higher overnight, and the euro is a bit higher this morning.
That was enough to give our markets a small boost in early trading, but the small gains quickly evaporated and the market is currently struggling with selling again. Tech is lagging for the second straight day.
Last evening, Chairman Bernanke stated that the economic recovery remains moderate, but that a double-dip recession is not in the cards. This also seems to be the signal from the ECRI index, which called the last recession perfectly. That index has been correct in calling for a slowdown, but not falling back into recession.
The dollar is a touch lower, due to the bounce in the euro. This is boosting oil prices to near $72, and gold is also higher to $1250.
The 10-year yield is lower to 3.15%; and the VIX was lower earlier, but is currently a bit higher to 37.13.
Trading comment: The S&P 500 is currently sitting at 1044, the exact level of the February lows. This is an important level. If it does not hold, it would market the first lower low in the index since last year. That would be a change of character for this market, and one that I want to pay attention to.
I have been correctly cautious on this market, and have used bounces recently to decrease our equity exposure and get more defensive. It's always hard to know how long it will take for a correction to run its course, but I want to preserve capital and maintain the flexibility to be in a good position to take advantage of it once it finally does exhaust itself.
In terms of sentiment, while the put/call ratios have recently been very high, the investor sentiment polls are not showing the same levels of bearishness as they did in prior corrections. So I'm concerned that we need to see more bulls converted over to the bear camp. Be patient.
long GLD
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