Sunday, April 01, 2007

April Fools

Market Action:
Friday’s market showed that news can move prices.  Just after the opening bell the Chicago Purchasing Managers announced their index came in at 61.7 versus expected of 49.3 and versus last month’s 47.9.  That number lit up the early trading and put the Dow up about 65 points in about 15 minutes.  Then there was the story about the House passing duties on Chinese imports which took the market down, with the Dow dropping from that up 65 to down 100.  From there, the market found a bottom to trade out of and the Dow rallied pretty much the rest of the day even though it was only up about 5 points.
Friday marks the end of the first quarter.  The new quarter should usher in a little harsher market condition than has existed for a few years, with the possible exception of the May to July 2006 period.  This year will have a definite downward bias.  With the maxim of “Sell in May and go away” hanging in the air from last year, we recognize that May is just a month away.  Shouldn’t be get started early on the selling?
We expect a volatile month and we will try to navigate through the storm that seems to be brewing.  We have read several articles this weekend trying to calm investors by telling them to stay the course and not worry about near term fluctuations in the market.  We can only wonder what these people will be saying by the end of the year. 
News in the week ahead:
Normally, the first Friday of the month gives us the monthly jobs report and this week is no exception except that the stock market is Not open on Friday.  In fact there are several news items due on Friday.  There are other news items for the other days this week so here we go:
Monday—March ISM manufacturing business index
Tuesday—February pending home sales
Wednesday—March ISM non-manufacturing business index (services)
Friday—Jobs’ report
This week will start to bring us warnings on how the first quarter went for companies with full earnings reports due out at least by the end of the month.  This should be an interesting week.
Dow Industrials:  12,354.35  +5.60
VIX: 14.64
HUI:  337.66
QQQQ:  43.53
QQQRR: 1.42 bid
QQQRS: 1.94 bid
QQQRT:  2.59 bid
RYVNX:   17.16
RYAIX:  21.67
RYCWX:  36.53
TLT:  88.28
BEGBX:  13.89

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