ECB decided to hold its QE program and rates steady today as the market was hopeful another slash in deposit rates and more QE was coming. As a result the US dollar reversed its losses on the session and was green by the time stocks closed. The dollar has been a driving force in commodity prices as a weak dollar supports higher commodity prices. Stocks bounced around for much of the session, but ended lower on the day. Preliminary volume statistics shows NYSE volume was higher while NASDAQ ended lower. You can bet after GOOGL, SBUX, V and MSFT report tonight volume will be HUGE tomorrow. This market was in need of a breather. Keep your exits in check and stick with your process.
Sentiment changed week over week, but continues to show a lack of willingness from AAII respondents to get overly bullish. Bulls ended the week on the AAII survey at 33.41%. Bears remained the same at 23.92%. However, the NAAIM exposure index did jump above 75% for the first time since last May. Last May was when the Dow and S&P topped out. Any pull back will likely be met with bears jumping and bulls running scared for the hills. It is important to have a plan to execute and not worry about what may or may not happen.
So far the earnings releases are not good news. V, GOOGL, MSFT and SBUX all have disappointed. QQQs are already down more than 1% on their earnings. AAPL reports next week along with AMZN. They will need a lot of support tomorrow to help with the beating they are currently taking in after-hours trading.
Next week’s FOMC meeting will certainly add to the fun. How dovish will they sound? I am sure they have to continue with the rhetoric. Expectations are for dovish language and a lack of action. As far as how the market react? We will find out next week.
Enjoy the weekend.
