Posts

The Old Normal?

It appears some of the volatility of the last few weeks may be dissipating from the markets finally.  Last week’s move in the S&P500 finished every-so-slightly higher, ending the week-over-week slide for the index.  It appears the price movement may stay between 2700 and 2800 for the week (and yes, 100 points sounds like a big range, until you realize the S&P500 had been having intra-day swings of over 100 points just three weeks ago.

Perhaps the biggest thing to watch for the week is Jerome Powell.  While there is a fair amount of fundamental economic data that would typically move the markets this week, the markets are looking for assurance that the new Fed Chair is not going to deviate largely from his predecessor Yellen’s generally dovish policies.  A slow, steady, data-dependent and measured approach to increasing interest rates is what the market is looking for.  Anything to the contrary and we could see volatility spike yet again.

With the futures are indicating a push for the the S&P500 back into the mid 2750’s again, it’s likely the trading range for the week will pivot around this amount.  While it’s possible the markets could break out to the high side, the set-up appears more measured at this point.  It looks like more range-bound trading as the markets — with 2700 being the primary support level, and 2800 being the primary resistance level — until the markets are comfortable Fed policy isn’t going to radically shift.

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.

Watch the FOMC

Markets have been on a v-shaped recovery ever since the sell-off started a few weeks ago.  Since bottoming on February 9th there’s been an aggressive recovery.  But there’s also been an interesting shift in sentiment.  Has good news become bad news again?  (Meaning the markets think good economic data could force the Fed into raising interest rates?)

Wednesday will be the release of FOMC notes at 2pm Eastern.  That will be where we get a better sense of what’s going on.  Provided the message remains consistent — that the Fed isn’t going to pull the rug out from under anyone, and they’ll continue providing transparent forward guidance — everything should move forward business-as-usual.

For the week, 2800/2825 are the upside resistance areas, but a technical retest of 1700 appears likely, with a more extreme re-test of 2650 or so (the 200-day moving average).  A pull-back to these levels would not be viewed as a trend failure or recovery failure unless there is a shift in macro-economic data.

The BigFoot database has stabilized and macro’s remain long.  Expect some mid-day volatility on Wednesday as the market sorts out a direction.  This shortened week may end up being a decision point for whether or not this market can regroup and move higher.  Based on how the technical patterns have emerged so far, it appears the short-term damage is mostly done, and the longer-term bull market is resuming.

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.