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Last week trading – is the outlook for April still bright?

Markets trendA week ago trading was about trend continuation. At least I saw it that way and I could see markets breaking thru marking this bull trend as intact. The entire last week markets were confirming my assumptions and all my accounts were growing. It was a filthy grow and I made quite nice cash.

Well, until Friday. Friday’s trading erased all my gains for the week and put back a question about the future of this trend. Although from a long term perspective, we are still in a bull market and there are no signs of changes yet.

Although, technically, I cannot see any significant red flags signaling reversal in trend (except one on my side) I can see one change, which may end up as a game changer.

SPY

Today we received unemployment data and these reveal a few things. One, it shows how out of reality Janet Yellen is when a few weeks ago she claimed that FED would start raising interest rates in six months, later she denied it and today data indicates that economy is probably, really, improving a bit and that they may actually start raising the rates.

Two, you can see a significant change in investors behavior. In the past they were accustomed to rising markets. The whole 2013 markets were rallying and investors jumped in any dip on the way. A complacency has never been bigger. Today it all has changed and investors are panicking whenever they see s slight dip or selling. They are afraid that markets are so extended than they no longer take a dip but run away. And that may be a significant change.

The result of this is a sideways market with last week attempt broken. Will today’s selling spark a broad sell off or is this just a blip and we are seeing a consolidation? What do you think?
 





2 Responses to “Last week trading – is the outlook for April still bright?”

  1. I have a suspicion that the downturn in Nasdaq yesterday was because of the launch of regulatory inquiry into HFT. My guess is that if HFT is deemed illegal and restrictions are applied, stocks listed on Nasdaq are probably going to be affected more than the other exchanges.

    regards

    R2R

    ps: This is just a conjecture. We might see more data later to support or deny this argument in the coming weeks.



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