Tomorrow’s Good Friday holiday certainly had a few traders headed out early to get a head start on vacation. Volume was considerably lower across the board, but given the holiday and new month today’s volume does not come as a surprise. Not much out there today jumping off the page except for the Dow Jones Transportation index. This index was the poster child for much of the rally from 2013 to last year. As of now it appears to be rolling over and the weakness we saw today is confirming our view of the index. At the moment we still remain in limbo as to the overall direction of the market here in the short and intermediate term. Until we get further price confirmation one way or another.
Tomorrow’s job report fireworks will likely be a dud by Monday and since markets are not open we get to see futures oscillate for a few minutes after the release. We haven’t the slightest clue as to how many jobs were added in the month of March. It was terribly cold in the Northeastern part of the country and California hasn’t seen a good rain in a long time. Which begs an excellent question is California’s draught a black swan in the making? The jury is still out on there and of course we still have China mess with territorial waters in the Far East. Even with the Iranian deal it appears Crude Oil may have priced in a bottom as the announcement of the nuclear talks making progress did not produce a devastating loss. There are potential areas of risk, but the real question is which one or some actually come to fruition?
Sentiment hasn’t changed much other than a few more people are bearish. Roughly 32% of the AAII respondents believe the market will be lower 6 months from now. 34% still believe we are going to be headed higher. The remaining 34% simply haven’t got a clue as to which way this market is going to go. Ultimately, regardless of who will be right or wrong the most important piece to the puzzle is a risk management process. How much are you going to buy? When do you exit? Are you going to adjust position sizes daily, weekly, or monthly? Just a few basic questions to yourself can and will go a long way.
We hope you have a great long holiday weekend. Use the time to recharge the batteries and come out swinging Monday morning. Aloha.
