Daily Market Update – April 1, 2015 (8:00 AM)
Yesterday was just another in a series of bad days that lately seem to come whenever there appears to have been some reason to be optimistic. For every really nice day there has been an equally bad day either before or after. That explains why we could have had about 15 days in which the market was 150 points higher or more in 2015 only to find a market that has been virtually unchanged during that period.
Yet despite what a rational person would describe as being a volatile environment, the actual volatility is virtually unchanged over the past 4 weeks. That’s because most days have seen very little variation in direction. They’ve either been good dqays from the start or bad days from the start. People patiently sitting and waiting for intra-day turnarounds, as is generally very common, have been pretty disappointed over the past month, with the exception of two days of trading.
With an acceleration of selling in the final hour, something that we’ve seen a number of times in the past 2 weeks, the DJIA finally did end up down 200 points and left the market in negative territory to end the quarter.
That hadn‘t happened for about 2 years, but it’s time to move on. It’s a new month and it’s a new quarter.
Hopefully April will follow the alternating pattern of the past 4 months, because that would mean a nicely higher move for the month, as lately they’ve been very neatly bundled packages of good or bad from the outset.
Looking at the futures this morning, which have deteriorated from having been perfectly flat, they are still far better from where they were late last night.
For some reason, not that there has to always be a reason, the futures plunged last night, after also trading flatly after the market close. When you see piling on in the futures after an accelerating negative close, that’s usually a sign of bad things to come.
This time it was a little unusual because there was a few hours of delay before the heavy selling started.
But somewhere along the line overnight whatever it was that upset traders seems to have taken a break, or better yet, has just gone away.
This morning has an ADP Employment Report in advance of Friday’s Employment Situation Report.
The ADP Report doesn’t usually get too much of a reaction from markets unless it’s really far from what was expected. This week, however, may be a little different because with markets closed on Friday there won’t be a chance to trade the Employment Situation Report, so ADP could end up being a proxy for that trade.
After yesterday’s sell off and that quick drop in the futures, it probably wouldn’t take too much to get back on that path. At this point too much of anything, either too many new jobs or too few new jobs could both be construed as bad news.
With bond markets open on Friday there could still be some disruption of markets after the report is released, but for equity traders it’s either doing something today or having to wait until Monday to respond to the data that could be inferred to have implications for the timing of any interest rate increases.
Otherwise, I don’t think there will be much to do for the remaining 2 days of this week, other than hoping that the market recovers enough to give the few positions that are set to expire this week a chance to either be rolled over or be assigned.
After that and after a 3 day break from markets it will be time to strap on and get ready for what could be an interesting earnings season as it could be anyone’s guess how the balance between currency issues and energy cost savings play out