Overnight, S&P futures had fallen all the way down to 1070, but as has been the case so many times the past year furious buying in premarket pushed the market higher in the 2 hours before the US markets open. Hence US markets opened far above the worse levels overnight. The S&P has jumped as I write all the way back up to test its 20 day moving average from below… I had thought potentially last night that the “gap” at S&P 1070 would be filled (the hard way) this morning but I forgot about the “anxious buyer” – he who buys futures without regard to price in urgent manner whenever is needed. Ironically this would of pushed us down exactly to the 50 day moving average, setting up for an excellent bounce play opportunity… but that ‘easy trade’ never came.
Clearly S&P 1111(ish) has been the ceiling of late, and for now until some more folks “thankful” for any opportunity to get back into the market get us back over the 20 day, we’re in the 20 to 50 day moving average band. As I type this it is already happening…
As for the Russell 2000 it is back in “not good” mode… once more the larger averages (NYSE, SP500) are masking a lack of follow through in the median stock.
On a side note, the hedge we put on mid week betting on an increase in volatility is helping us out today… or WAS helping us out, but already giddy buyers are rushing into the market and the “what me, worry?” attitude is back. VXX opened at its high and has sold off for 50 minutes straight… boo yah.
Disclosure: Long VXX in fund; no personal position