I don't know how many times I have said that I don't like a market that opens too strong, too early. Yesterday was just another glaring example. The Dow spiked 150 points higher just after the open, but by late day it have given back all of those gains. A late day rally did help it manage to finish in positive territory, but it's not the kind of action I would prefer.
This morning, the market is higher again in early trading, but let's hope we don't see a repeat performance. There is very little news this morning on both the corporate news as well as economic data fronts.
Asian markets were mixed overnight, with China higher and most others lower. Europe has been down this morning, although many markets are paring their losses.
The dollar is roughly flat; Oil prices are higher to $72.65, but gold prices continue to languish, down slightly near $1192.00.
The 10-year yield is up slightly to 2.96%; and the volatility index (VIX) is -5.5% lower to 28.0. It is now below both the key 30 level as well as its overhead 50-day moving average. I would like to see the VIX continue to drift down below 25, which would support a further bounce in stocks.
Trading comment: I have heard that by some technical measures, this market is as oversold as it has been since the March 2009 lows. Yesterday I showed a chart of the oscillator that also looked pretty oversold. So it is reasonable to expect the market to bounce here, the question will be where it runs into resistance. But let's allow it to at least bounce before we go there.
In my trading range scenario, we may have seen the low end of said trading range for the near-term. I still have some positions I would like to trim, but I will wait for higher levels before I do any more selling. My portfolios are still fairly defensive right now.
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