Special Risk Capital Management LLC

Market Slowing; Next Week Important April 9, 2016

April 8, 2106 – Last week the market basically stalled.  Volatility, yes, with big moves both up and down but not much overall movement.  I’m not seeing a lot of selling just yet, more like a Lack of Demand (buying) coupled with knee jerk reactions to news.  Is oil going up or down . . is Japan devaluing the Yen ? (etc.)  Traders are nervous.  Corporate earnings have not been great with the major U.S. banks reporting next week,  and that could tip the markets one way or the other.  With all of this positioning going on whatever the move is it will be a quick one; nobody wants to be left behind.

Money Flow is weak (top pane), Accumulation buying (green, volume) has slowed, but Distribution volume (red, selling) has not picked up.  We’re hugging that lower trend line (purple) as well as the 4905’ish price area.  It just feels like the “spring is coiling” for a move and the major players are waiting.

I’ve cut back on exposure though my market indicators remain Bullish / Long.  They’re been there for awhile and maybe we can make it though April with just a pause and not a decline / correction.  I am cautious, especially since I don’t see many stocks that are on my buy list.  The pie chart below shows the general price strength of stocks in the broad S&P 1500 Index.

Pretty evenly split between the three rankings, though the edge goes toward Neutral & Weak.  Even with Biotech and Semiconductors, Japan and Latin America showing up as strong this week, their recent volatility concerns me.  HealthCare and Real Estate look like safer sectors in this market environment.  Next week could be pivotal, so let’s keep a close eye especially on big bank earnings reports.

Have a good week.     ………..  Tom  ………..

price chart by MetaStock; pie chart by http://www.HighGrowthStock.com.  Used with permission.