Stock market is 'horrible', but investors are turning bullish …
The bad news is that we just finished lower for a fourth-straight session. The good news: Hey, at least the market didn’t just add another black crow to the flock. Not the “She Talks to Angels” kind. Rather, the kind that pecks away at positions.
Here’s how it works: After a decent stretch, the S&P SPX, +0.24% started with three trading sessions ending at the lows of the day. That’s a rare and bearish scenario known as “three black crows” to the market technicians. How rare? Only once this year has any single day closed at its low. Now, all of a sudden, three of them in a row, followed by a still-weak fourth.
“Traders like to watch the tone of the close,” Scott Nations of NationsShares told CNBC Thursday afternoon. “On Monday, it meant things were weak. On Tuesday, it meant things were weak. After three days—the tone is just horrible, there’s no other way to look at it.”
The crows can also be seen hovering over semiconductors (see below).
Clearly, the market is reeling just a bit, but ominous avian signals aside, individual investors seem to be excited about the opportunity the retreat has provided. According to the American Association of Individual Investors, bullish sentiment just surged more than 11 percentage points from last week to 38.4%, the biggest jump so far this year. Still, it’s below the 38.8% bull-market average.
Key market gauges
Futures on the Dow YMM5, +0.10% and the S&P ESM5, +0.18% pointed to a fifth straight day of losses, following a mixed session for Asia ADOW, -0.48% Europe SXXP, +0.25% is shaking off some of yesterday’s weakness. Crude CLM5, -5.62% after a Yemen-induced spike, is giving back some of those gains. Gold GCM5, -0.59% is slightly lower.
The quote
HBO/Everett
“If it was this draconian and it worked, then maybe we could have a discussion that said ‘what we’re doing is working.’ Yes. It’s terrible, and we’re losing a lot of humanity but, hey, it’s working. But it doesn’t work. It’s draconian, and it doesn’t work.” — David Simon, creator of “The Wire,” getting interviewed by Barack Obama about U.S. drug policy.
The economy
In a quiet end to a quiet week, data, the Commerce Department said the U.S. economy grew at a 2.2% annualized pace in the final quarter of 2014, unchanged from its previous estimate. Later Friday morning, traders will focus on consumer-sentiment results from the University of Michigan, along with some employment numbers. To cap it all off, Janet Yellen gives a speech in San Francisco at 3:45 p.m. Eastern Time. Read: Yellen must decide between today and the future.
This article is from:
Stock market is 'horrible', but investors are turning bullish …
