Friday, March 2nd Morning Market Comments

8:54 AM - My original thesis remains interesting--top in Yen, higher bottom in indices--but I would not commit much to the idea until I see better relative strength from those more speculative sectors. The TICK distribution remains negative and declining issues hold a solid lead over advancers. Have to respect what the broad market is telling us. Have a great AM and trading day. Back tonight with a wrapup on the Weblog.

8:49 AM - Note weakness in semis and ER2 on relative basis. Not a good sign for bulls. These should lead upside; what it says is that we continue in a risk aversion mode.

8:47 AM - We need to see the markets make new AM highs on these TICK bounces; otherwise, I'd be careful re: the Yen and downside.

8:44 AM - Be careful; ER2 gets hit when Yen catches any kind of bid. Still a hostage to that market and that will be all important going forward this AM.

8:42AM - Would like to see ER2 participate better, but if you buy the opening hypothesis idea, the pull backs in TICK that are at higher levels and higher price levels provide entry on long side as long as Yen is orderly.

8:37 AM - That hypothesis remains my scenario. Let's see if that 1397 area holds as ES low.

8:32 AM - What I'd be looking for in very early trade would be signs that the Yen has put in a short-term top and that equities are putting in bottoms above yesterday's bottom. That would set up quite a rally possibility. Just a hypothesis I entertain.

8:25 AM - Very abbreviated comments this AM, as I begin work at 9 AM. Once again, we see a tight connection between moves in the Yen in the overnight market and moves in the stock index futures. This is important to monitor this AM. As before, the volatility in the preopening market should correlate with high volatility this AM. Note that the 1410-1411 region of ES has been overhead resistance. If buying interest can sustain a move above that level, I'd be looking for tests of yesterday's lows. My recent post notes that we haven't yet seen large money flows into stocks that would be indicative of a market bottom. That keeps me from acting upon many of the otherwise bullish historical patterns that suggest strength following several days of market weakness. At this point, the markets seem to be hostage to the currency action and that is trumping everything. At least one more note after the open. Michigan sentiment at 9 AM; that's pretty much it on the economic report front.