The S&P 500 futures crept up to new highs yesterday. The S&P has closed higher 9 of the last 11 days and 6 of the last 6. We have seen a lot of bull markets and some big bounces, but 6 years into the credit crisis and the S&P up 130% from its March 9, 2009, low -- not even the Fed could have predicted how far things could go.
Over $11 trillion in market value has been replaced since the S&P traded down to 666. After Countrywide Mortgage went out of business and all the foreclosures that followed it looked like the housing market would never recover, but it is. Despite the recent warnings from the bank stress tests, the financials are on their highs, the Dow is trading at an all-time high and the SPX is trading 1556, just 1.3% away from its all-time high of 1576 set in October 2007. It has been an incredible turnaround and it’s all due to the Fed’s quantitative easing. It has been a nonstop buy fest in 2013, and it’s not over.
With nearly $60bil going into U.S. mutual and exchange traded funds, there has been a glut of cash flooding the markets. Almost every day the Dow 30 and the broader market imbalances continue to show new money being put to work in the stock market. There has been no letup in 2013.
March quadruple witch: The quadruple witching expirations have always been a turbulent time for the markets, but with electronic trading smoothing out the process, the markets up so much and the volumes so low, we think it’s safe to predict the expiration will go off without a hitch ... but the S&P will have to get past the jobless claims, producer price index on Thursday and consumer price index, Empire State mfg survey, industrial production and consumer sentiment on expiration Friday. Historically it’s an up expiration, but the stats tend to get weaker later in the week. According to the Trader’s Almanac, the March triple witch day itself (Friday) has been mixed the last 12 years, down 3 of the last 4.
|NED DAVIS DAILY STATS|
|Day (Period)||Geo Avg||Ari Avg||Median||Num Up||Num Dn||Total|
- It’s 7:15 a.m. and the ESH is trading 1548, down 2.5 handles; crude is up 17 cents at 92.23; and the euro is down 26 pips at 1.3034.
- In Asia, 9 out of 11 markets closed lower, (Shanghai Comp. -1.04%, Hang Seng -0.87%).
- In Europe, 9 out of 12 markets are trading higher (CAC +0.04%, DAX-0.05%).
- Todays headline: “S&P Futures Signal a Lower Open.”
- Total volume: 754k ESH, 1.6mil ESM, 43k SPH and 40k SPM traded.
- Fair value: S&P -0.67, NASDAQ -6.01
- Economic calendar: NFIB small business optimism index, Redbook, 3 year note auction, Treasury budget
- Markets & Exchanges