Stock Market Trading: 16 May 2014
European stocks are set to open flat this morning as traders remain nervous following the second day of fairly serious selling.
Disappointing earnings from Wal-Mart
did not help reverse losses in the Dow Jones, with the index closing 167 points lower at 16,447.
Whilst many pundits are putting the sell off down to the weak European GDP figures, such reasoning struggles to explain the size of declines in the US and Asia.
Instead, the European data seems more likely to have been an excuse for previously pent up selling pressure as we reached key technical levels.
In addition, several indices
were already highly inflated so there was probably some profit taking place too.
The question now is whether these levels will be seen as a good point to buy or whether the markets will enter panic mode.
Either way, there doesn't appear to be much appetite for bargain hunting on the open so traders need to be wary of the bears gaining momentum as we head into the weekend.
Stock Market Trading: 15 May 2014
European indices are set to ease back on the open as traders worry that yesterday's practically flat finish marks the apex of the up move.
Negative sessions in the US and Asia overnight have also reinforced concerns that the top may be in.
The central banks are still clearly in the bulls corner, what with Janet Yellen coming out with dovish comments last week, Mark Carney pushing back expectations for an interest rate hike yesterday and the ECB all but stating that they will do something stimulative at their June meeting.
However, it's very telling that the markets aren't in runaway territory and one has to wonder what more the bulls are waiting for?
The sell off in the Dow yesterday will not go down as one of the world's great quandaries.
You might argue that the changing economic scenario over the last week has not warranted a 200 point rally.
This, coupled with a situation in the Ukraine that is slipping towards civil war, and many investors saw an opportunity to book some profits.
There is certainly some downside risk from here.
The Dow Jones
dropped 101 points to finish at 16,614.
Stock Market Trading: 14 May 2014
The winning streak continues for the Dow, however yesterday's rise was only moderate.
The blue chip index traded a very tight range which is encouraging up at these levels as no one seems to be panicking yet.
US retail sales were disappointing but this seems to have done little to hurt sentiment, optimism remains.
As a result, the Dow Jones closed at its third straight all time high, up 20 points at 16,715.
Despite major European indices also nudging new annual highs yesterday, trepidation about whether we can justify theses levels sees the expectations for this morning's opening to be fairly flat.
Whilst the markets have demonstrated a remarkable ability to shrug off the crisis in the Ukraine and interpret weak China data as a positive, there is a sense of foreboding about this up move.
Will this be a repeat of the other rallies we've seen this year whereby there's been just enough bullishness to draw people in just before we sell off?
At the moment it feels as though there's a wall of money waiting for a 'clear' sign of which way spread betting
markets are going to go at this inflection point.
When we do get that signal, expect a stampede.
Stock Market Trading: 13 May 2014
We saw another all time high for the Dow yesterday, with the index closing 112 points higher at 16,695.
As a result, it's not a huge surprise that our spread betting account
holders are selling the Dow fairly heavily at the moment.
Quite what is fuelling the market's ability to shrug off weak Chinese data and an escalating situation in Ukraine has many perplexed, but the bulls don't appear to be asking any questions.
A correction today would seem like a strong possibility; suddenly things have got more interesting for stocks.
European equities are set to gain on the open, buoyed by the record highs in the US and a strong session in Asia.
However, whilst US markets have had no trouble taking out new highs, with European indices approaching their yearly highs once more, they will probably need a concrete reason to move out of their well worn trading range.
Stock Market Trading: 12 May 2014
As the earnings season starts to wind down, US equities will look back on the last few weeks favourably.
The Dow Jones managed to close at an all-time high on Friday at 16,583, up 32 points.
It was a topsy-turvy day of trading but in the end the bulls emerged victorious.
Although the markets are high, clear direction is difficult to come by and the moment.
Most European indices are set to open higher this morning, but the CAC
has several companies going ex-dividend which is shaving 23.7 points off the starting price.
Despite mounting fears in Ukraine, momentum seems to be fairly evenly balanced as both the bulls and bears wait for a clear catalyst.
The range bound nature of markets in 2014 has seen many false peaks already, with sharp falls shortly after.
Although we've seen some modest gains over the last few weeks, it looks as though we could be heading into some resistance for the major indices.
With a very light economic calendar today, and the Ukraine vote keeping money on the sidelines, Monday may simply see traders mark time.