If you thought the weakness in the NASDAQ and Russell 2000 would at least give a boost to fear you would be wrong. The VIX index closed below the 15.00 level as the index has remained around the 15 level for the better part of the last two months. Traders aren’t fearful here yet despite this market not being able to punch back into new high territory. Volume was mixed on the day with volume higher on the NYSE and lower on the NASDAQ. This market is giving off the impression we’ll resolve this chop by heading towards February’s lows. Anyhing is possible, but do not count out the ability for this market to rip higher leaving the bears in the dust again. We are in correction mode and will operate as such until price gives us a clue to change course.
We have seen this market churn for much of the last few weeks and despite this churn bears aren’t in control of sentiment. Sure, you can point toward bear blogs and see them bearish. However, they are always bearish! It is hard to really gain much of anything from having one perpetual view of the world. With that in mind, AAII still is slanted towards the bulls. Well, it really favors Neutral respondents with more than 40% of respondents indicating their view is neutral. Bulls still outnumber bears. NAAIM Exposure Index still shows active managers are heavily long. The index currently stands at 92% and the least bearish bet was 30% long! Perhaps the last few days may have changed a few after reporting their exposures, but there is a sense across the board this is a buy-the-dip market.
There was news out today Russia is gearing up to take more of Ukraine land away from Ukraine. Looking at a map of the country and knowing what geographic locations are pro-Russia and pro-European it is easy to see Putin will have very little resistance. Kiev is pro-Europe, but it sits on the half that likes Europe. The other half, where Crimea is loves Russia. It won’t be hard to imagine Putin simply annexes more of the Ukraine. This simply situation has caused issues with pundits here and even has them opining this to be a negative on this market! Perhaps it will be the news that pushes this market over the edge or maybe not. We see weakness and we’ll operate under these conditions.
Whatever this market brings us we’ll take. In the meantime, get out and enjoy the weekend ahead.
