Friday, March 16, 2012

Market Madness Daily Market Update - 3/16/12

It was a relatively uneventful day for the major indices with flat finishes across the board with slightly more selling than buying taking place. Our Friday update will therefore be brief as usual and we'll see you back here on Sunday for our Weekly market updates and index charts.

Have a great weekend!

The standout winner of the day was Bank of America (BAC) with a 6% gain of 58 cents to close at $9.80. It was just four short days ago that this stock was at $8. That's a gain of  %22.5 in four days! Incredible. And there couldn't be a less deserving company (well OK, there probably could be a less deserving company out there somewhere...)

The DOW shed about 20 points to close at 13232 for a 0.15% loss for the day which tracks right with other indices. The tech composite (COMP) gave up a little less barely even registering a loss at -0.04%, or 1.11 points. The VIX on the other hand plunged again today, losing almost a whole point from its already historically low levels to close at 14.47. A loss of over 6%. As noted in updates of the last few days this has begun to put into serious question our view in prior weeks of a VIX bottoming process. Time to reevaluate.

Charting only the S&P 500 (SPX) and Russell 2000 (RUT) today first up is the SPX. Finishing barely in the green today with a 0.11%, 1.57 point gain this index remains quite healthy. If positive sentiment continues there is no reason why the index shouldn't go on setting new highs for the time being. There is certainly little technical resistance to doing so. MACD further improved on the daily frame while our MultiSlow-Stochastic readings appear to be turning in agreement with each other. That latter could be a sign of impending correction of some sort and indeed, we do find a modest correction down to the major trendline/2011 highs to be the most likely outcome.

We pointed out yesterday that the RUT was right back at its upper channell resistance yet again and that this has been a big challenge for the index. And once again, we pulled back off that resistance to close lower by 0.15%, or 1.28 points. Between the small magnitude of the loss and today's environment of overall market weakness we can't learn anything from today about the likely relative performance of this index going forward. Monday should provide more clarity on the situation.

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