Gene Peroni's Daily Podcast

Last Friday’s market action was a technically scorched-earth setting for stocks. What was most unsettling was perhaps that there was no one pinpoint factor or item to account for that decline. 

Stock futures indicate that the NASDAQ could recover most of yesterday's losses.

Food, energy and water are all categories that are showing good relative strength within the marketplace. 

The American Association of Individual Investors has published its latest sentiment survey and it shows a sharp decline in bullish consensus, well below the lows in mid-February. 

In my estimation, the selloff in technology stocks has driven this category to highly oversold levels that probably largely bake-in the impact of higher interest rates on this aggressive growth sector.

Stock market trends are reflecting a war time theme. 

Last week’s market behavior was characterized by a great deal of flip flopping between growth and value. 

The Dow and the Nasdaq getting some technical traction at their respective support areas. 

Yesterday’s most significant news for the stock market was the release of the Fed Minutes in which they outlined how they intend to taper. 

Yesterday’s market action was a flip flop from the previous session with the Dow considerably outperforming the Nasdaq. 

Yesterday’s 1.9% gain in the Nasdaq eclipsed gains in other major indices, including the Dow which was up just 30 basis points. 

I’ve recently made the case that the market’s rebound later in the 1st quarter was substantive and could prove to be a launching pad to higher levels in 2022. 

It was striking how similar the retreats were among the major market indices yesterday. My take on that is that it had more to do with end-of-the-quarter activities than news items. 

The final day of a quarter that unleashed significant volatility amid a myriad of challenges on a number of fronts, including geopolitical, especially the Russia-Ukraine war. 

One of the headline technical features in yesterday’s trading was the DJIA breaking out above its 200-day moving average at the 35,000 level. 

From aerospace to utilities and many categories in between, the underlying market appears to be building a sturdy foundation that could serve as a launching pad for higher levels over the short run. 

Technical indicators are aligning quite nicely indicating that we could see higher levels over the short term and I continue to be quite bullish about the market’s long-term prospects as well. 

Volatility is simmering down; the VIX is trading near the 23 level, this after breaching near-term support at 27. This lower volatility is a welcome sign. 

Four consecutive rally days puts into perspective the pivot days that we had in January, February and again this month… 

Yesterday’s closing levels for the major market indices may have defined their upper boundaries for what could be a short-term trading range. 

Yesterday’s market action may have proven to be something more than just a technical baby step toward recovery: the resiliency in the session was striking, impressive and the first back-to-back significant gains this year. 

Stating the obvious perhaps: the market is oversold, but it’s not extremely oversold.