Tag Archives: market lab report

Market Lab Report – Premarket Pulse 9/30/15

Major averages closed mixed yesterday and in the lower half of their respective trading ranges on lower, though above average volume. The Russell 2000 Index undercut its prior late August lows while the S&P 500 Index pulled down to a point that is roughly even with its own late August lows, all of which naturally sets up the potential for a reaction bounce, and we are seeing that this morning in the futures. Futures are up more than 1% at the time of this writing as Chinese consumer sentiment came in above expectations. European markets are consequently up more than 2%. It seems as if world markets are dancing to the economic beat out of China, with reports showing a slowing economy met with gap downs the following day in the US markets, while with positive reports such as the one out of China yesterday on consumer sentiment, the market gaps higher. Technically, however, the market was in a position to bounce after six straight days of downside movement. While the downtrend in US markets seems intact, expect heightened levels of volatility. Fed Chairwoman Janet Yellen is slated to speak at the St. Louis Fed conference today at 3 pm EST, which could have an impact on markets.

Market Lab Report – Premarket Pulse 9/29/15

Major averages got hammered yesterday on substantially higher, above average volume, closing near their intraday lows. The Russell 2000 Index has undercut its late August lows while the S&P 500 and New York Composite are roughly at their late August lows and the NASDAQ has more room to go on the downside before reaching its own late August lows. Biotechs dumped again as well, leading the charge to the downside as Congress is set to go after Valeant Pharmaceuticals (VRX) for what it considers to be “overpriced” drugs. Keep a close eye on profits from any ETF short positions as falling markets often bounce hard. The flip side is that the market could be embarking on a second leg to the downside in a developing bear market, although that is not something that can be determined in real-time. Even the best investors are unable to see in advance how far a market correction or bear market will progress. We remember quite vividly how Bill O’Neil, in June of 2000, declared the market to be in a new bull phase based on the precedent of October 1962 when the Cuban Missile Crisis was finally resolved peacefully. As we know now, that bear market did not end in June of 2000 and mark the start of a glorious new bull market – it was only the first false rally in a brutal bear market that did not find a bottom until late 2002.

Market Lab Report – Premarket Pulse 9/28/15

Major averages reversed Friday on mixed volume after trading higher for much of the day. The market gapped higher on Friday after Fed Chair Janet Yellen’s speech Thursday night indicating that rates would most likely rise by the end of this year. This was interpreted as a vote of confidence in the US economy despite troubles abroad. Further, Q2 GDP growth came in higher than expected at 3.9%, adding further evidence of an economy on the mend. Nevertheless, markets sold off due in part to concerns that House Speaker John Boehner is leaving Congress at the end of October which could lead to a government shutdown. That said, government shutdowns have occurred numerous times since the 1970s. Each time, markets have reacted with only mild negativity with both the S&P 500 and NASDAQ Composite down on average less than a percent. Futures are down almost half a percent at the time of this writing on continued concerns about growth issues in China. The countryâs industrial profits in August fell 8.8% from a year ago. The worldâs second largest economy seems to be slowing faster than expected. However one might wish to spin the news to fit the market’s action, the bottom line is that stocks have been in a choppy sideways consolidation since the “Capitulation Monday” lows of late August, and many leaders that bounced in that process have started to roll over again. This, of course, brings into play the possibility of a new down leg developing at some point in the very near future, one reason why both the Market Direction Model and Volatility Model shifted to a sell signal last week.