Stocks Leaving March, Going Out Like A Lion, For Stocks, April Is As Good As It Gets — Historically The Best Month Of The Year For Equities, Friday Jobs Report — When Market Is Closed — Remains a Wildcard
China got the ball rolling yesterday evening and global equity markets never looked back. Hong Kong’s Hang Seng Index closed up +1.51 percent, while the Shanghai Composite led all indices ending up +2.62 percent to a record high. Over in Europe, Germany’s DAX led the way, closing up +1.83 percent, and the French CAC closing up +1.1 percent. Here in the U.S., the DOW closed up 263.65pts., or +1.5 percent, while the S and P 500 climbed 25pts, or +1.22 percent and the tech-heavy NASDAQ rose 56pts., or, +1.15 percent. Dovish comments from the Governor of The People’s Bank of China (PBOC) set the bull run in motion. Many traders are now expecting Beijing to undertake a U.S-fed style quantitative easing campaign in the not too distant future. These comments, along with benign U.S. economic data “gave bargain hunters some motivation to step in,” said James Meyer, Chief Investment Officer at Tower Bridge Advisers.
For Stocks, April Is As Good As It Gets
“April is the least cruel month for stocks, posting the highest monthly average return since 1950, returning just over a +2 percent average gain since 1950 [64 percent of the time]. Tyler Durden, writing on the March 30, 2015 website, ZeroHedge.com, cites a recent note by Bank of America’s Chief Technician, MacNeil Curry: “We believe NOW ITS TIME TO AN ABOUT FACE and turn bullish risk assets for the next several weeks. From both a price and seasonal perspective, evidence says that the consolidation in the S and P 500 is nearing completion; and, the larger bull trend is about to resume. Treasury yields should also participate, as the week-long consolidation in 5yr, yields is drawing to a close.”
If it were only this easy, we’d all be millionaires. I personally put in some ‘stops’ today, rather than sold any positions. Buying protection here is cheap; and, I am concerned about the Friday Non-Farm Payroll report for the number of net new jobs created in the U.S. in the month of March, The U.S. stock market will be closed for ‘Good Friday,’ observance. If, we get a ‘hot’ jobs number — something 300K or higher — we could well see futures plummet ahead of next Monday’s open — as traders and institutions once again, fret over an interest rate hike by the Fed — sooner, rather than later. If we do get a ‘hot number,’ you won’t be able to sell on Friday. Most of the ‘smart money,’if they decide to see ahead of Friday’s jobs number — will likely do so on Wednesday — the day before the last trading day [Thursday, this month. On the other hand, if we get a weaker than expected jobs number, something in the low 200Ks, or lower, then the rally will likely continue into next week.
As I said, I am hedging my bet, in that I am buying ‘protection,’ by putting in stops — just in case we get a hot number Friday. That way, if the number is weak, I am still fully invested going into Monday; and, I will get ‘stopped out,’ if the number is hot. Something to think about. V/R, RCP