A Dull Market Day With Big Implications
What a boring day! At least yesterday, the price moved some, but today was just blah. There was sideways trading ahead of tomorrow’s March retail sales report. I’m not sure how much that is playing into today’s price action, but it was boring. The good thing is that I’m getting a lot of rest and have plenty of time to lie around.
When you go from big, impulsive moves to these sideways, blah periods of time, it is a warning message to me that we are just consolidating sideways here, that this is not the start of some big initiation higher.
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But with the VIX at 29, a few more days like today, and we could see it at 23, and if the VIX goes to 23, that would suggest further upside. So either volatility is going to pick up, and “something” will trigger another leg down, or the slow burn in volatility will help grind stocks higher.
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Volume was also non-existent today, which makes the price action even more interesting. This suggests a lack of sellers in the market, so the fact that the market is stuck with anemic volume levels tells us the bulls may be in trouble.
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For various reasons, it would seem to me that another leg lower is likely. Maybe it’s because of the way the chart looks, with those two big down legs, which look more like waves 1 and 3 to me. Right now, a lack of movement is the market’s friend because the less it moves, the more IV will burn off, and the more likely it is to go higher, but something suggests to me that a move higher isn’t going to happen.
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. ...
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