Not the best way to start off the second quarter despite the Dow Jones Industrial average closing flat on the day. European markets weren’t open due to the Easter holiday, but Asian markets were. Disappointing economic data hit the tape as the ISM Manufacturing and Markit PMI both came in much lower than expected. Led by small caps and the NASDAQ the market marched lower. Volume ended the day lower than last Thursday’s end-of-the-month inflated figure. AAPL could not hang above its 50 day moving average as the stock saw its shares fall more than 13 points. AMZN fell as well unable to hang onto its 50 day moving average. A jump at the end of the day lifted the market off its lows of the day. Without volume higher on the day we did not see distribution. We remain in an uptrend and will continue our operations on the long side.
A concern here is the move towards more defensive areas of the market. We can only speculate on whether or not the recent action is signaling rotation from small caps to large caps. Basic Material stocks lead the market lower on the S&P 500 falling more than 120 basis points followed by Tech falling 111 basis points. Industrials fell 103 basis points. Odd considering the Dow Jones Industrial Average only fell 4 basis points. Healthcare is what kept the Dow afloat moving higher by 107 basis points. UNH add 13.52 points to the index today as the stock jumped 300 basis points. Interesting action today and we’ll continue to stick to our model.
Tomorrow we’ll get a glimpse of more PMI data coming out from the rest of Europe and should be the talking points when the US wakes up tomorrow. Over on this side of the pond we’ll get a reading from ISM New York and Factor Orders. These should give those who care something to talk about and something market pundits can blame or give credit to as to why the market is moving. If the US PMI is any indication the world’s collective PMI should be weak collectively. It all boils down to price and following the trend and our uptrend remains in place.
Welcome back from the long weekend and Happy Second Quarter.
