As I flew to Phoenix I watched as early morning strength in the markets on Thursday turn into an afternoon rout for risk assets. It turned out to be an ugly day for the bulls as you can see below.

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People blamed “rising tensions in the Middle East”. I don’t think so. The markets were ready to decline. The data suggested a Q1 peak and the stock market waited all the way until the end of March to put in a high. This is the scenario I mentioned throughout Q1. My forecast was for a single digit percentage pullback lasting into May, but bottoming by Memorial Day. That still seems probable. I also still believe this will be a decline to buy.

And, as bad as the media played yesterday’s reversal, what did it really do so far? It just took the S&P 500 and NASDAQ 100 back to the levels last seen a whopping two weeks ago. Please note my strong sarcasm with “whopping. The charts of the two indices are below.

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The government is going to release the March jobs report today at 8:30 am. The trend has been for better than expected job growth which could spook the bond market. I think with the recent weakness, we may see a bounce for a day or so before some sideways to lower activity.

On Wednesday we bought BALT and more EPOL, more QMAR, and ore QQQ. We sold FMAY, FJUN and levered S&P 500. On Thursday we bought levered S&P 500. We sold DXHYX.

More By This Author:

Two-Day Decline – No One Cares
New Week, Month And Quarter Begin – Back To Narrowness
The Masses Said Small Caps Were Death & Going To Spiral Lower