04 April 2014

SP 500 and NDX Futures Daily Charts - And Here Comes the Rinse

On Wednesday in the stock market commentary I said that "the wash cycle is almost done."

And indeed is was, as on little weak economic news today the stock market took a serious nosedive, led by the momentum stocks. Stocks peeled off much of the paint that was applied to the tape just recently for the end of quarter.

Live by the scam, die by the scam.

So what next? Overall the market is going to continue feeding on hot money and thin volumes. Also on Wednesday I said that the exchanges would be embarrassed if they stopped all the HFT hot potato trading, because the lack of participation in stocks would be all too apparent.

The market is a bit lofty and will remain vulnerable to exogenous shocks and news, which are difficult to predict. There are certainly plenty of tensions in and around eastern Europe and the Mideast. Today we saw a newsflash about US objections to a Iran-Russia deal that some saw as motivated by an attack on the petrodollar. I was watching this develop since February, and it looks more like the US is objecting to Russia ignoring the sanctions designed to bring Iran to the negotiating table over their nuclear program.

I include a valuation chart put out by JPM that likens this market valuation to some others including those that preceded that last two big market selloffs.   I picked this chart up at Zerohedge.  

While I may not always agree with their interpretation of some things, and certain some policy preferences,  I cannot help but thank them for all the hard work that they do in supplying the latest news, and acknowledge their often very valuable insights and context to the financial news and economic developments.  I use their site every day and I am glad for it.  I am glad and grateful for the work that all the bloggers provide, in addressing the yawning void in the financial news that is left by the mainstream media.   I try to give them any exposure and encouragement that I can.

Have a pleasant evening.