13 January 2015

SP 500 and NDX Futures Daily Charts - Mother's Little Helper, What a Drag(hi)

Stocks had a big rally on the open today with the Dow Industrials up a sold triple digits, about 280 points.

Prices were wallowing at these levels, when KB Homes came out with their results, which took the stock up a bit. But then things were not so rosy on the conference call, with KBH backing off projects in Houston and Orange County. And then they signaled that there would be pressure on profit margins.

Bam! KBH went from up to down pretty sharply in a Manhattan minute.
That and some other company news had the markets a bit put off, with word on the twitter that some of the trading desks were selling calls to try and lock in some profits at these levels.
Then the word came out doubting the QE from the ECB that the markets were already pricing in to this bubble rally, and BAM!
So we ended up with an outside reversal day, which in technical parlance is not encouraging.   If we were in any kind of normal market we would be looking for more downside action.
However, news out of Europe about a court ruling, non-binding as it may be, on QE will likely move the market as irrationally in one direction as another.  So let's see how things go overnight.
At the end of the day, this is your stock market on drugs, those drugs being peddled by the Central Banks who are subsidizing the well-to-do punters almost directly with this trickle down QE approach that does little or nothing for the public, but helps to jigger financial paper.
Have a pleasant evening.