Schaeffer's Trading Floor Blog
Stocks quoted in this article:

I mentioned the action in S&P futures and here is what the picture looks like...


Chart Courtesy of Thomson/ILX

As I alluded to, the sell-off at 7:30 AM is being blamed on GM cutting their guidance. (More on the GM story can be found here.) In the last few minutes we received housing starts (which came in stronger than expected) and trade deficit data (which widened more than expect).

As they stand now, the S&Ps are two points below fair value...gold is up 1.7 to 443.1...oil is down 19 cents to 54.86...

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Good Morning

by 3/16/2005 7:51 AM
Stocks quoted in this article:

We start the day with a bit of volatility. When I flipped on the television around 5:00 AM this morning, S&P futures were nearly three points above fair value as there was talk of a rally following chatter that oil output would be bumped up in order to reign in prices.

Now futures are a roughly a point below fair value. The sell-off began around 7:30 and that is the same time that General Motors cut their guidance. I will dig into this and see if any other stories are floating around.

Outside stocks - gold is up 1.9 to 443.3 while oil is down 39 cents to 54.66...

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Final Figures

by 3/15/2005 4:32 PM
Stocks quoted in this article:

If the numbers you saw below were the only thing you paid attention to, you might not find today's action noteworthy...

Index Index Value Point Change Percent Change
S&P 500 (SPX) 1197.8 -9.1 points -0.75 percent
Dow Jones Industrial Average (DJIA) 10745.1 -59 points -0.5 percent
Nasdaq Composite (COMP) 2035.0 -16.0 points -0.78 percent
Russell 2000 (RUT) 626.8 -3.5 points -0.55 percent
CBOE Market Volatility Index (VXO) 12.85 0.23 points 1.8 percent

While the broad market indices were all lower, the losses were contained to less than one percent. Looking at the perspective below...

You still see mostly minor losses but may note how wide spread the losses were. However, even that may not be all too significant....

But if you consider today's action along with some of the signs of weakness I noted Friday you start to see underlying signs of selling pressure. Some may describe this as a distribution phase...

For most of the day we tracked the SPX relative to support near 1200. As I noted in the post below, this failed just before the close. However, the SPX is still fairly close to that level so tomorrow's action will be important to watch.

A few interesting charts came to my attention near the end of the day. I am going to dig into those now and that is where I will pick up tomorrow. Hint - two are in the retail space but have shown dramatically different charts...

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Closing View

by 3/15/2005 4:05 PM
Stocks quoted in this article:

Here is what the end of day picture looks like...


Chart Courtesy of Thomson/ILX

As you can see, the SPX bounced along 1200 until a late batch of selling pushed it through....

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Stocks quoted in this article:

Mike says - "The action in the markets has an investor like me very cautious. Do you have an opinion as to why the markets keep jumping around day to day?"

My response - I am glad you asked about opinion because that is all I have...of course there is an old saying about opinions being like armpits...but I digress....

What I do know is that I have seen a number of reports that detail how hedge funds are becoming an increasing part of the trading volume. With that in mind, consider what we saw yesterday. The market drifted sideways yesterday morning and then slid as oil moved higher. Then we see a burst of buying that hits when the Genentech news made the rounds.

While you can never say with certainty what is driving individual decisions, it feels like there is money chasing whatever seems to be moving but we don't have much in the way of strong underlying themes. The net result is churn as this money jumps around....

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