Dollar puking again
Stocks opened their day sharply above their flat lines as global markets rallied in response to yesterday’s dovish remarks from Fed Chair Yellen. Yellen’s cautious tone boosted risk appetite overseas and at home as she advocated a more gradual path on interest rates. Furthermore, an early rally in crude oil worked to buttress the opening move higher. The pace of gains has diminished in recent days and the Dow and S&P haven’t moved 1% on a closing basis since March 11 and trading volumes have declined.
On the day, the Dow added 84 points, or 0.5%. The S&P gained 0.4%, and the Nasdaq gained 0.5%. Fear has left the building as the VIX fell 1.9% to 13.56, hitting its lowest level since August.
Earnings will start in a week or two and they promise to be dismal. A report this morning said earnings will be down 6.9% for the first quarter, but if you take out the energy sector they will be down 2.5%. Either way, its pretty sucky.
Tomorrow’s economic data will include March’s Challenger Job Cuts and weekly initial claims consensus 265k), which will cross the wires at 7:30 ET and 8:30 ET, respectively. The day’s data will be capped off with the 9:45 ET release of the Chicago PMI for March.
I mentioned in the trading room that I didn’t like the action in the oil refiners, as I saw bear wedges on all of them. Even as oil has rallied, it looks like they may have seen their moves for ow and could retrace 10-15%. If you want to take a look at the following daily charts you may see what I mean. WNR, HES, VLO, & MPC. All are at the bottom of their channels here, but I think the most vulnerable of them all ( for some fundamental reasons) is TSO.
I am adding TSO as a short between the 86.00-87.50 area. I’d like it to bounce little to short, so use that range, if anything changes I will let you know.
See you in the morning.