21 April 2015

SP 500 and NDX Futures Daily Charts - Shaky Times In Croneyland

Stocks made an early move and then gave most of it up into the afternoon.

Volumes to the upside remain light, and so are vulnerable to profit taking. My sense is that they are primarily gimmick driven.

After the bell Chipotle beat its earnings and revenue, but missed on comparable store sales. Further, they see the rest of the year growth in the single digits. While they may sound good for most stocks, for a company with Chipotle's multiples that was not enough, and the stock was selling off after hours.

Yahoo just missed everything, and the business continues to wallow, although they are doing well in the their investments like Alibaba.
YUM says they were hurt by the strong dollar.  They get quite a bit of their sales from China.  Their results missed expectations pretty much across the board.   However, the stock traded higher after hours by affirming its full year forecast.   Until they don't.

I think the stock market is vulnerable to a sell-off because its composition seems as substantial as meringue.

However, buying programs meet most selling and the Fed seems invested in keeping paper assets inflated for their constituency, so unless something happens to really provoke some selling volumes I think the market can keep drifting.

This is a set up for a crash IF the right trigger presents itself. And the responsibility for this is with the Fed and the other regulators who permit such a dangerous market, driven by spoof trading and hot money, to become the new normal.
The problem in trying to play it is that many short positions are time sensitive, and if volumes remain light one falling into the price gimmicking machine of the algos.  It is one thing to be right, and very much another thing to have the right timing.  This is why I prefer riding trends rather than the wash and rinse cycles of the wiseguys.

Have a pleasant evening.