As we head into the second quarter of the year, markets are showing some resilience. Before we look at major indexes, however, I want to share a few recent blog posts. (For those of you who receive this in an email, you can also read it directly on my blog.)
First, a post with a little bit of personal history and some information about my recent return to day trading index futures.
Second, a post on going beyond tradition and authority.
And last, a post with some ideas about how to learn directly from the market.
Stay tuned for more blog posts on these topics in coming weeks!
Current market conditions
Economic and macro data is mixed; there’s nothing new here—this is almost always the case. For much of March, we were looking at apparently bearish patterns in major indexes, with the DJIA and the Russell 2000 on the edge of a breakdown. However, strength started to emerge in the last two weeks, culminating in a solid rally into the end of the month. (See chart of the Nsadaq below.)
This is a conflicted period for markets. While we hold grave longer-term concerns (and could even see a bear market emerging within the next 6–24 months), we will watch near-term price action and lean to the upside as long as the bulls are in control. One of the easiest patterns to monitor is at the top of this blog post—the DJIA is now pressing back into previous support, perhaps setting up a significant rally. Even if our longer-term concerns are valid, new all-time highs are possible before any weakness sets in. Cultivate flexibility and focus on risk management.
The week ahead (potentially market-moving datapoints)
- Monday: 10:00 ISM Manufacturing
- Tuesday: 10:00 Factory orders, JOLTS
- Wednesday: 8:15 ADP Employment, 8:30 Trade Balance, 10:00 ISM Services
- Thursday: 8:30 Jobless claims
- Thursday: 8:30 Employment