Markets rallied to key resistance levels and have to make an important decision this week. After two weeks of testing the bottom and coming to the middle of the range, will they fade here or go to the top of the range? It’s a mixed market with the Transports gapping up to start the week, but oil seems to have found a near-term high but violated the high it made earlier in the year.
Markets haven’t been behaving well with Thursday/Friday being the latest example. I’m not even sure it was the weak jobs number which came in at 103,000 despite expectations of 182,000. Supposedly the Ides of March always augur in bad weather which leads to a "less than" haul. We’ll see soon enough in 30 days whether the weather caused an outlier.
U.S. stocks tumbled Monday as President Donald Trump continued his criticism of Amazon, sending those in the technology and consumer discretionary sectors lower. The selling also comes ahead of the Trump administration's plan to unveil this week the list of Chinese imports targeted for US tariffs. The list of $50 billion to $60 billion worth of annual imports is expected to target "largely high-technology" products.
Crude oil prices dipped as trade war fears went away after a private report that appears to indicate that oil supplies may see a big increase this week. Genscape, the widely followed energy market data and intelligence company, reported that oil supply in Cushing, Okla., was up 2.18 million barrels last week. The increase and the fact that some of the Geo-Political concerns did not actually blow up into a supply disruption over the weekend led to a correction in the price of crude.
Federal Reserve Chairman Jerome Powell went to Wall Street and was not happy enough to enact whatever rate hikes the Fed had planned for this year, and markets were told to count on three more in 2019. Nobody knows what tomorrow or next month will bring, let alone next year. I came away thinking this guy is trying to pop the stock market bubble.
Financial markets remain on high alert as the U.S.-China trade war fears are providing the needed incentive for bears to take control. Friday’s sell-off in U.S. equities was ugly, after President Trump announced plans to impose tariffs on up to $60 billion of Chinese imports. The new proposal dragged the S&P 500 down by 2.1% and sent the Dow Jones Industrial Average into correction territory (a 10% fall from its 2018 peak). It was the worst week for the S&P 500 since January 2016 and the fourth worst performance since 2010.
Here we are at the most important trading week of the entire year. You’ll never hear about this on the business channels, but Gann designated the March change of season as the most pivotal cycle point for markets of the entire year. Longtime readers of this column know I’ve come up with all kinds of names for it through the years.
Equity markets are coming out of a mixed session sandwiched in between critical economic indicators; while the E-mini S&P 500 was unchanged yesterday, the Nasdaq gained 0.5% and the Dow lost 0.5%. Gold surprisingly lost ground overnight, yesterday’s session should have been constructive enough to keep the sellers at bay through CPI data at 7:30 a.m. Central.
March appears to be a relatively non-distinct month on the trading calendar. It is not in the bottom or top quartile of performance metrics in any of the top three equity indexes. It lands at fourth best in the S&P 500, fifth best in the Dow Jones Industrial Average and sixth best in the Nasdaq Composite.