The week ended with a respite from the indexes relentless push upward. The major question raised by the mavens of the market is whether this is a pause or the beginning of a reversal. A review of the major trading indices sheds little light on the future direction of the markets. The S&P 500 (SPX) closed at 1328.17 - down 4.24 or -0.32%, the NASDAQ 100 (NDX) closed at 2,321.18 - down 31.29 or - 1.33%, and the Russell 2000 closed at 840.89 - down 5.88 or -0.69%. Volume continued to be low. Oil hit new highs as did gold and silver. Physical commodities continued their upward trend, while the US Dollar hit new lows against the Euro. Liquidity was lacking in the indexes I trade - RUT and SPX. It was very difficult to execute trades at mid-market. Slippage was a concern in trade execution. Be heedful of liquidity when making trading decisions. The ability to enter and exit a strategy at a fair price is an integral component of successful trading performance.
Is this the beginning of a market reversal? I am unwilling to make my trading decisions based on this assumption. I will continue to trade what the market gives me. The earnings cycle starts this week. These earnings, combined with the guidance given in conference calls, will help give us a sense of market direction for the coming weeks. The focus of the economic reports will be on inflation. Any hint of inflationary pressure and interest rate increases will have an immediate effect on the market.
Have a good trading week. Be focused. Know where you are and where you might be going. Remember: Chance favors the Prepared Mind." - Louis Pasteur
This week's economic news:
Monday April 11:
Economic: N/A
Earnings: Shaw Group (SHAW) - BTO(Before Open), Alcoa (AA) - ATC (After the Close)
Other:
Tuesday April 12:
Economic: ICSC Goldman Stores Sales - 7:45, International Trade (Trade Gap) - 8:30, Redbook - 8:55, U.S. Treasury Monthly Report - 2:00.
Earnings: Fastenal(FAST) - BTO
Wednesday April 13:
Economic: March Retail Sales - 8:30, February Business Inventories - 10:00, Crude Oil Inventories - 10:30, Beige Book (Fed Summary of Current Economic Conditions by District) - 2:00.
Earnings: J.P. Morgan Chase (JPM) - BTO, ASML Holdings(ASML) - BTO, Northern Technologies (NTIC) - BTO, Fairchild Semi (FCS) - BTO
Thursday April 14:
Economic: March Producer Price Index - 8:30, Initial Jobless Claims - 8:30,
Earnings: Hasbro (HAS) - BTO, Google (GOOG) - ATC, National Bankshares (NKSH) - ATC, Valmont Industries (VMI) - ATC
Other: Last day of trading for options on the SPX, DJX, MNX and NDX. Settlement is based on Friday opening of component stocks.
Friday April 15:
Economic: March Consumer Price Index - 8:30, Empire State Manufacturing Survey - 8:30, March Capacity Utilization - 9:15, March Industrial Production - 9:15, University of Michigan Consumer Sentiment - 9:55.
Earnings: Crane (CR) - BTO, Mattel - BTO, Bank of America(BAC) - BTO
Other: Expiration of April Options
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