Thursday, March 15, 2012

Will SPX 1400 Be A Ceiling?

The market is higher again in early trading. Yesterday the market sold off in the afternoon, but the damage to the market was minimal.

Economic data was solid this morning. Initial jobless claims were lower for the week, coming in at 351,000 and continuing claims were down also. The Philly Fed survey improved to 12.5 from 10.2 in February. And the Empire Manuf. index improved to 20.2 from 19.5 in February. So the economic data continues to show steady improvements in recent months.

Asian markets were up slightly overnight, while Europe is mixed this morning. Fitch Ratings lowered the outlook for the UK to 'negative' last night. But the euro is still getting a bounce relative to the dollar.

The lower dollar is helping commodities bounce a little. Gold prices are up a tad to $1651 and silver prices are higher as well. Oil prices are also up a little near $105.55.

The 10-year yield is holding on to yesterday's massive gains and sitting near 2.26%. And the VIX is roughly flat near 15.35.

Trading comment: The SPX is approaching that big round 1400 level. When the SPX got to 1300 it pretty much powered through it and then corrected to come back down and retest 1300 as support. But given how little correction we have had since SPX 1300 I don't anticipate the same action. More likely, the 1400 level will act as resistance the first time up and the market could pull back from current levels. Of course, I have been preaching not to let the action in the major indexes keep you out of making good investments.

KAM Advisors has long positions in VXX


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