Overnight selling in Asia was also affected by concerns about slowing US economic growth. Japan and China were both lower, with China's CPI coming in above expectations at 3.6%. European markets are closed for the Easter holiday.
Bonds are rallying hard on the payrolls data, with prices up and yields plunging. We had begun to see the 10-year yield moving higher from that 2.00% level where it had been stuck for so long. But today we are back down to that key support area with the 10-yr trading near 2.03%.
Not much in the way of corporate news, but AOL (who still owns that stock?) did sell $1 billion worth of patents to Microsoft (MSFT).
Commodities are mixed, despite the dollar being lower. Oil prices are down near $104.40. Gold prices are higher to $1645, but silver and copper prices are down.
The VIX is seeing a big bounce, up 11% so far today back above its 50-day average to 18.60. Looks like we were stopped out of our VXX hedge a little early.
Trading comment: The S&P 500 is down for a fourth straight day, which is about the most consecutive down days we have seen in the index since last November. Currently at 1379, that's about a 3% decline from the recent highs. I have been expecting a mild pullback in the 3-5% range, so we are now in that zone. The 50-day average for the SPX comes into play around 1371 while a full 5% pullback takes the index down to 1350. Of course, we could easily see something more but I think in that area buyers will step in and we will get a bounce. The key to determining if we will get a bigger correction this spring/summer is the tone of the ensuing bounce and if it is able to take the indexes back to new highs or if it runs out of steam and leaves a double-top looking formation. But in the near-term, I would be looking for a bounce in the markets.
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