Is The Market Selloff Over?

The market is getting a small bounce in early trading, but so far it feels like a weak attempt. Lots of folks are pointing out that yesterday was the biggest decline of the year, but it hasn't exactly been a normal start to the year. As such, we were overdue for a day like yesterday, which wasn't even that bad of a selloff in the big picture scheme.

This morning's ADP Employment report was solid at 216,00 payrolls in February. That's up from last month's 173,000. Hopefully this translates into a good govt. payrolls report on Friday. Q4 productivity was also revised higher to 0.9%, although there was a big jump in unit labor costs.

Asian markets were lower overnight, but Europe is higher this morning despite the big Greek debt swap that is taking place soon. There isn't much action in the euro or the dollar.

Commodities got hit yesterday, and are relatively flat so far today. Oil prices are down slightly to $104.50, and gold prices are up just a bit to $1677.

The 10-year yield is getting a small bounce to 1.96%. And the VIX is down -3.5% so far back near 20.15 after a big spike higher yesterday. The VIX is still above its 50-day average which is hovering around 19.60 and we will have to see if it acts as support.

Trading comment: Everyone wants to know if yesterday was the end of the selling? I think that is unlikely. We have seen plenty of one-day pullback over the last few months, but I think the breaking of that uptrend line that's been in place means that the market could have a bit more consolidating to do. I still don't think it's going to be anything other than a mild correction though. The S&P 500 is still well above its uptrending 50-day average (currently 1323), and I think we could see the senior index come closer to this support before all is said and done. I covered a bit more of our etf hedges yesterday, and would look to start doing some buying on any further weakness in the market.