Some Algos Are Finding New Buys Out There

While the needle hasn’t exactly moved much, the bleeding seems to have stopped for now as the BF database crept ever-so-slightly higher toward the long side over the weekend.  The move itself is not all that statistically significant.  The fact that the declines stopped may be however.

For now, the trading range has not been broken.  But futures point to a higher open signaling the potential for things to break above the 50-day moving averages.  From a technical perspective, this would indicate the market could be picking up momentum and looking to break-out to the high side from here.

Before you get too excited though, you might want to pump the brakes.  Geopolitical tensions remain high right now – especially with the recent shelling of Syria by the US.  This may further strain relations with Moscow.  It’s not necessarily a direct economic concern given the over-supply of oil right now.  But it’s a wild card as to what they may do and how that impact could ripple through to other players.  It’s the uncertainty factor the markets hate.

As Earnings Season gets into full swing the markets will likely be paying close attention to both earnings AND guidance this round.  Strong guidance will be important.  Also, keep your ears open for any indications of slowing global economic growth.  The story has been a global coordinated recovery for a while now.  Any signs that the recovery is getting shaky could lead to more uncertainty for this market.

Bottom line, while the story for a higher market is still in place, the wrong sequence of events could spook things and lead us lower.  As of now, the trading range between 2600-to-2700 remains for the S&P500.  The 200-day support and 50-day resistance levels continue to move closer to each other.  As they do, it’s likely the 50-day resistance will fade.  A breach of the 200-day support may still be viewed as problematic though.  More to follow on that one IF we breach that level (currently at 2599 — so we may as well call it 2600 for our purposes).

IMPORTANT DISCLOSURE INFORMATION

Please remember that past performance may not be indicative of future results. Different
types of investments involve varying degrees of risk, and there can be no assurance
that the future performance of any specific investment, investment strategy, or product
(including the investments and/or investment strategies recommended or undertaken by
BigFoot), or any non-investment related content, made reference to directly or indirectly
in this blog will be profitable, equal any corresponding indicated historical performance
level(s), be suitable for your portfolio or individual situation, or prove successful. Due
to various factors, including changing market conditions and/or applicable laws, the
content may no longer be reflective of current opinions or positions. Moreover, you
should not assume that any discussion or information contained in this blog serves as the
receipt of, or as a substitute for, personalized investment advice from BigFoot. To the
extent that a reader has any questions regarding the applicability of any specific issue
discussed above to his/her individual situation, he/she is encouraged to consult with the
professional advisor of his/her choosing. BigFoot is neither a law firm nor a certified
public accounting firm and no portion of the blog content should be construed as legal
or accounting advice. A copy of the BigFoot’s current written disclosure statement
discussing our advisory services and fees is available for review upon request.