The market snapped its five-day losing streak yesterday as this time around a last-hour surge took the S&P from near the flat-line to a 0.35% gain. Stocks were strong in the first forty minutes of the session but gave all of those early gains back in the next hour, and the choppy action continued for the rest of the day.
Overall the action remains lethargic despite yesterday’s advance, but we at least have a new a new lower level pivot forming at 1690. In addition to the recent action being choppy intra-day, volume has been light. It feels like investors, because of the Fed’s decision not to taper, are not yet compelled to sell, but also not eager to put new money to work in the market with the thought that tapering is just a matter of time.
We remain cautious and will judge the composure of any bounce we get off this pull-back. There are not a lot of compelling chart set-ups for now and headline risk is creeping back into the equation with the potential government shut-down less than a week away. Depending on your risk appetite, it would make sense to keep it light heading into this weekend, but we have seen the 2013 market climb the wall of worry before.
S&P futures are down eight handles or so this morning as the government shutdown becomes more of a focus. While the government has been able to strike last minute deals on budget and debt issues a few times over the last couple years, this battle appears to be extra contentious with both sides digging in their heels.
Gold, meanwhile, is up about 1.3% so far this morning as perhaps investors once again look for a safe haven after the precious metals gave back all of their Fed “no taper” day gains.
Disclosure: No relevant positions