Stocks Treading Water Ahead Of Big Economic Data Releases

I’m out of juice today. This one is going to be really short; maybe it is the nice weather. It feels like a nice summer’s day out on eastern Long Island, I feel like doing absolutely nothing this afternoon. Anyway…

Stocks finished the day pretty much flat today, with the S&P 500 up about 15 bps, while the Qs finished the day higher by 30 bps. Right now, we appear to be in a holding pattern, at least for today. That may change tomorrow with jobless claims and durable good order along with a second read on 1Q GDP.

The pattern in the S&P 500 futures suggests that we still see some more downside, with a push to around 4,155. The VIX was down almost 8% today, and there was no lift to the S&P 500; on a day when falling implied volatility should have lifted equities, it didn’t. I would actually view that as negative for stocks overall. It has been very rate over the past year and a half to see a day like today.

The volume also disappeared today, with the SPY ETF seeing its lowest levels since the middle of February. Maybe I was not the only feeling like being on summer vacation.

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Based on the VIX and low volume day, one would have expected the bulls to be firmly in charge. They clearly weren’t, and this does suggest something.

The S&P 500 continues to hold the March 2020 uptrend. However, I was able to put in a downtrend for the index today for the first time. If this trend is correct, coupled with what I think could be the start of a Wave 3 lower, we could see sharply lower prices in the days ahead. Starting tomorrow, the economic data picks up materially.

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Russell 2000

The Russell surged today by 2%, continuing the confusion that is this index every day. At times it seems to have no sense of direction. I’m going to try to take another look at this tomorrow and see. Right now, the index got stuck at Monday’s highs.

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Disclosure: Mott Capital Management, LLC is a registered investment adviser. Information ...

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