Quick Update On The Action Since February 12th

by Geoff Garbacz | 02/23/2016 10:54 AM
Quick Update On The Action Since February 12th

In the last week, the day to day action has peaked our interest. Starting on on Friday, February 12th, the S&P 500 began a substantial three day rally as it rose 1.95% that Friday. Then after a long weekend, the S&P 500 rose 1.65% on both last Tuesday and Wednesday. So over those three days, the S&P 500 rose 4.85%.

Then on Thursday and Friday the S&P 500 fell by -0.47% and then -0.001%. Yesterday saw another gain of 1% or more as the S&P 500 finished with a gain of 1.45%. Today is a struggle in early trading as the S&P 500 is lower by -0.70%. So the conclusion in the last seven trading sessions is that the up days are strong up days and the down days are mild losers. The takeaway is that the S&P 500 is moving higher since hitting a low on Thursday, February 11th with a close of 1829.08.

Yesterday we published our review of the week ahead. This week will be driven by continued Q1 earnings, Fed Speak, economic data and geopolitical news. All in all a pretty normal week on track.

Just released Consumer Confidence fell to 92 2. from 97.8. Clearly, a weak stock market is the driver of this poor number. Existing Home Sales were also released and came in at 5.47 million versus an estimate of 5.30 million. A strong number.

The top issues impacting the day to day moves for stocks is oil. If oil is up, then stocks are up. The reverse is true as well. China has faded from being a main concern of the U.S. stock market but still remains the second issue to watch closely. The third issue of importance is Central Bank action and the move towards negative interest rates and in some cases beyond. So far markets globally are not liking thge

Also, since February 12th, the intraday action has improved. Neither the S&P 500, Dow Jones Industrial Average or the Russell 2000 have closed below support. We must continue to watch this closely.

Last, the CBOE Volatility Index VIX is trying to move below 20. Yesterday the VIX closed at 19.38. Today it is back above 20 at 20.06.

So for now the stock market has improved in the last week and now it will have to show more if the S&P 500 is going to move above 1950.

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