Quite the fireworks in the morning session with sellers pushed the markets lower in fast trade. By 10 am buyers were back in the saddle pulling the market back to positive territory. Economic data was mostly positive being led by the Philadelphia Fed Business Outlook index really coming in better than expected. Just after 10am release of economic data really juiced buyers, but it wouldn’t last for long as buyers lost steam and the market would drift for the remainder of the trading session. Volume ended the day mixed with NYSE edging prior day’s volume while the NASDAQ saw trading fall. Not a bad day. However, we di d see the NASDAQ and Russell 2000 lag significantly behind the S&P 500 and Dow Jones Industrial average. If this turns into more than one day we have something to worry about. Until then we’ll continue down our path.
Despite the volatility in the market we saw sentiment stay in the bull camp. AAII bulls remained in control coming in at 36% while bears stayed flat at 26%. Who ever vacated the Bull camp slid over to the neutral camp and didn’t get bearish. Typically, we have seen bulls jump right into the bear camp. NAAIM exposure index remained below 90% finishing at 89%. The bearish bets from last week were taken off with no one reporting any bearish positioning. Market participants appear to be confident this market will be able to shake off whatever pundits fear. They may very well be right. We’d like price to dictate our moves and not a crystal ball.
From an overall market perspective the 3/14 low is a pivotal point to keep an eye on. If we were to experience a big volume move below that level it would likely cause us to adjust our current view on the market. It certainly would bring on us hedging our portfolios. Outside of a move below this low there isn’t a need to get “cute” with the market here. Simply execute the trend following strategy and you will do just fine.
As the weekend begins make sure to get out and enjoy the world around you. Move, play, and enjoy the finer parts of life. We’ll see you back next week.
