Thursday, June 06, 2013
Turnaround Day moves to Thursday ahead of the Jobs Report
The US Dollar took a plunge during the session, but the move failed to keep stocks down for long. By early afternoon the stock market found its footing and pushed higher closing at its highs for the session. Volume rose on the NYSE, but fell on the NASDAQ. Institutions were certainly active in the market today ahead of tomorrow’s job report. At one point during the session the S&P 500 was below its 50 day and looked as if it wanted to head further south. The defense of the 50 day moving average is certainly a bullish indicator for this market to bounce. A solid day for market bulls, but given this market’s ability to react violently to news tomorrow will certainly be fun to watch. Volatility broke out during the session as the market fell along with the US dollar. The only thing not to rebound nicely was the dollar index. USDJPY broke through its 50 day moving average and fell below the 96 level for the first time since April. The USDJPY currency pair has correlated well with the Nikkei 225 and tonight’s trading session should be filled with fireworks. Falling into a bear market the Nikkei has come off more than 3,000 points from its high falling below its 50 day moving average. Sure we could see a bounce, but does that mean its going to revert back to its May’s high? Sentiment has shifted in favor of the bear camp, but not at an extreme level. Bulls fell below 30% to 29.47% on the AAII sentiment survey. Bearish respondents couldn’t crack into above 40% closing the week at 38.95%. NAAIM manager survey pushed the median responded to only 55% invested. Interestingly enough if we look at the extremes there was at least one manager who was 200% long when responding to the survey. On the flip side the max exposure on the downside remained at 125%. Sentiment is favoring the bear camp, but given the trading action over the prior week it is no surprise. Tomorrow should be a fun-filled day with lots of action regardless of direction. Try to avoid the talking heads and focus on price. Have a great weekend!