All Along the Watchtower
“There must be some kind of way out of here,”
Said the joker to the thief,
“There’s too much confusion, I can’t get no relief.
Business men – they drink my wine
Plowmen dig my earth
None will level on the wine
Nobody of it is worth.”
“No reason to get excited,”
The thief – he kindly spoke,
“There are many here among us
Who feel that life is but a joke
But you and I we’ve been through that
And this is not our fate
So let us not talk falsely now
The hour’s getting late.”
For those that have followed me over the years, you know Friday morning’s are usually reserved for the office “classic of the day” that best describes the current market environment. I believe today’s classic from Jimi best describes how Wall Street traders are feeling as the market winds down the week.
This week’s action has been mixed but mostly bearish with the Dow up 32 points coming into today’s action; the S&P down 6 points; the Nasdaq lower by 46 points; and the Russell 2000 down a 20-spot.
It will be interesting to see how the close goes as traders will have to decide to stay long, short, or flat. Friday’s have been weak since early April as traders have worried about geopolitical tensions.
Although it seems as though Putin has pulled back troops, the Ukrainians will be voting this weekend on a referendum for secession. The Russian leader has tried to get the vote delayed for a week but there could be protests with continued violence regardless of the outcome.
Next week is May option expiration week so volatility could be back in rogue.
The trading range appears likely to stay intact into next week and the clues could come quickly if there is a continued breakdown back into the lower end of them. The bulls continue to show signs they WANT to push higher highs so next week should be a little more exciting than this week.
As the market makes the turn, the Dow is up 31 points to 16,582 while the S&P 500 is higher by a point to 1,876. The Nasdaq is popping a 12-pack to 4,063 and the Russell 2000 is advancing 2 points to 1,099 but is still struggling with the 1,100 level.
I have some last minute updates for our current trades so let’s go check the tape. I will be back on Monday morning with the charts and a ton of commentary. Until then, have a great weekend, everybody!