The 1st Quarter was Good for Stocks

The 1st Quarter was Good for Stocks

The 1st Quarter was Good for Stocks

$DIA, $SPY, $QQQ, $VXX

Q-1 of this year good for stocks as the S&P 500 climbed just over 5.5% during the frame.

Mapping the move of the S&P 500 and the other major stock market indices over the last Q, we see that March was a different month compared to January and February.

The S&P 500 peaked on 1 March at about 2,396 and proceeded to consolidate The Trump Tally over the following weeks before closing the month and the Q at just under 2,363.

The S&P 500 fell 1.4% in March.

The Big Q: What does it mean as we move into earnings season for Q-1 Y 2017?

The Big A: the internals show a shift in the market mindset as seen it the market’s “fear guage” the VIX. I is up about 1% Monday and the highest mark in Y 2017.

And a Bank of America Merrill survey of 165 fund managers that control $500-B in assets show that 34% think stocks are “overvalued” the highest level in the 17-year history of the survey.

The market’s valuation has been stretched and despite the move lower in March, the S&P 500 closed the month at 18X expected Y 2017 earnings, that 18X multiple is the highest P/E ratio since Y 2004 and above the 5 -year average 15X.

The fundamentals need to start picking up in order to justify the extended valuations. If they do not we may see this earnings season bringing volatility back into the market.

As it stands Monday, the Atlanta Fed’s GDPNow model forecasts a 0.9% GDP figure for Q-1 of this year, down from 2.1% in Q-4 of Y 2016, and that would be disappointing to many participants.

Monday, the major US stock market indexes finished flat to unchanged at: DJIA -13.01 at 20650.76, NAS Comp -17.06 at 5894.69, S&P 500 -3.88 at 2358.83

Volume: Trade on the NYSE was heavy, with 1.18-B/shares exchanged.

  • NAS Comp +9.5% YTD
  • S&P 500 +5.4% YTD
  • DJIA +4.5% YTD
  • Russell 2000 +0.9% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Neutral (0.02) Bearish (-0.37) Neutral (-0.06) Very Bullish (0.50)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Bullish (0.26) Neutral (-0.14) Bullish (0.33) Very Bullish (0.58)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Bullish (0.34) Neutral (0.08) Bullish (0.35) Very Bullish (0.58)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.35) Bearish (-0.27) Very Bearish (-0.57) Neutral (-0.21)

Stay tuned…

 

 

 

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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