SPY and QQQ Trade at New Highs But Close Near the Lows of the Day

Our sentiment indicators have moved in the direction of greed this week as the market has rebounded following fears of coronavirus. You can read more about how I view sentiment in this post that I wrote for the Chaikin Blog.

The 13-day moving average of the CBOE Equity Put/Call Ratio is at 0.55, flat with last week’s reading. Note that this metric recently traded below the levels seen in January 2018. Fears of coronavirus have helped to alleviate some of that overly bullish sentiment. Directional Change: Flat

* Due to a data issue, this chart is different from the chart that we normally use here. However the underlying message remains the same.

The VIX has moved to 14.71 from 15.43 last week and remains above the two-year regression line. Directional Change: Toward Greed

Market Commentary/Looking Ahead

US equities were mostly higher in Tuesday trading, but finished just off the lows of the day. REITs, Energy and Consumer Discretionary were the best performers. Communication Services, Consumer Staples, and Technology finished lower. Treasuries were weaker across the curve. The dollar was lower vs the euro, flat vs the yen. Gold finished down 0.6%. WTI Crude ended up 0.7%, but still closed below $50/barrel.

  • Outperformers: REITs +1.30%, Energy +1.04%, Consumer Disc. +0.77%, Health Care +0.62%, Materials +0.51%, Financials +0.40%, Utilities +0.38%, Industrials +0.35%
  • Underperformers: Communication Svcs. (0.61%), Consumer Spls. (0.36%), Tech (0.34%)

S&P futures are up 0.3% after US equities finished mostly higher on Tuesday. Asian markets were higher overnight led by China and South Korea. European markets are also stronger. Treasuries are weaker with the curve steepening. The dollar is stronger vs yen but slightly weaker on the euro cross. Gold is little changed. WTI Crude is up 1.4% despite a bigger-than-expected crude stockpile build in the API report after the close yesterday. 

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