March Break?

Wouldn't it be great if the market closes for a week, so we can all leave for a break?   Nah, we are having too much fun still with this market to go on a vacation.    Things are definitely looking better today with another outstanding performance from BKX  (+5% week) as it extends it‘s Wednesday breakout.   It won ‘today’ against the China #’s that were mixed at best, yet the data did raise the probability of another(expected) RRR hike sooner than maybe anticipated.   Why do we keep stressing BKX and financials in general you ask?    Even though,  we chose not to play the sector this time around as there's plenty to do,  we have to be aware what's carrying the market up these days.    No doubt, in this rather quiet newsflow week, the financials are not quiet and doing their best to push the SPX to retest 1150 as of close today.    This is just pretty amazing,  sellers are still on 'strike'  and any little buying moves the tape upwards because of it.  

If we could just add “performance anxiety“ at these levels, we’d see conviction buying and a volume breakout.   How 'dreamy'  is that?.   Maybe just a tad with FOMC  ahead next week.

The question right now for most of us is that "do we want this market to go any higher now?"   Doesn't this sound ironic that the long traders are asking a "silly" question like this?    Here's a good reason though!    Many of our followed high momentum stocks have been doing really well the past few weeks and they haven't had enough time to digest the recent gain properly.   With the financials pushing higher, the rest of the market tape is on it‘s coattails.    This, in the end, will make some plays very stretched out and the risk rises substantially when entering a trade on some very extended plays.

Well, we can only wish for the best scenario, but we still have to respect this market regardless how we feel.  In AMC news, POT  raised its guidance for next quarter and this is actually might be pretty significant news.    We can't remember the last time POT did this.    All we can say is that the turn in commodity area is getting clearer by the day for the long term.    Tomorrow, the Fert group is probably in play again after a pretty weak week, in addition, the usual steel/coal groups and OIH will get another look.    See, it's all about perception into the future.   As far as earning sensitivity is concerned, the commodities are the most beneficial group when economy is improving.

Bottom line,  this week may be so quiet that no one is talking about anything anywhere.   Next week, we'll have a very important FOMC,  whose tone may finally change some and so we may not get a significant move until.  Up or Down!.  In any case, this week is setting us up for some major volatility next week.    We simply have to be ready for it.