What is it with red Fridays as pointed out by BZB during the mid-day post and also Mrkt_Seasonality? Buyers are just not very confident going into the weekend especially with so many negatives like the European Debt crisis hanging over equities. Strength and weakness in the dollar dictated trading this week, but commodities diverged for the first time today in a while.
The premium between the VIX spot and the May futures has closed; those futures expire next week. There is still about an 8% gap between the VIX and June futures. The major indices are all teetering on the edge of support, with the banks breaking support convincingly today. Defensive stocks like PG and JNJ continue to attract attention. Rallies have come on lighter volume, and the number of new highs has contracted. EEM sold off again today, closing below its 50 day moving average for the third straight day. The market felt like a bucking bull all week about to throw off its rider and maybe we need to anticipate more volatility next week for option expiration. One hypothesis is a weak start to the week to setup some buying opportunities to end the week.
Also, many leading stocks remain under pressure. Just when it looked like AAPL was ready to breakout over $350, it is now facing a breakdown below $340 and the 50 day moving average. The move today maybe setting up a move lower to the $330 level.
Related posts:
