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Hunting season: Heads up Wabbit!



I don't know about you, but for some reason I am really looking forward to the upcoming three-day weekend as the markets are closed on Good Friday. I would like to wish everyone a very happy and healthy Easter and Passover. Clearly anyone involved with the financial markets is overdue for some extra rest.

In a mid-day message yesterday I wrote about how difficult it is to have the courage of your conviction in a market that hasn't made a great case in either direction. When the environment gets this mixed on the technical and fundamental fronts, people start to look for reasons to act. Typically when you hunt for reasons, you find poor ones. When we're willing to wait for reasons, they come soon enough.

Many were commenting on the importance of the market recently breaking above the 200-day moving average. Typically that is a very good thing, suggesting a possible trend change could be fast approaching. While that may be true, when the 200-day is still trending down, moving above it isn't as important. Is this some lesson learned throughout time? Nah, I just looked at last year when the S&P 500 (SPX) moved above its 200-day moving average after making what appeared to be a higher low. That didn't work so well.

I frankly don't know if moving above the 200-day is good or bad. All I know is that last year's head fake means I should pause before becoming overly excited.

This is a mixed market that is not moving based on fundamental or technical issues. As a result, it may prove costly to hunt for reasons to support a view rather than waiting for clearer signals from the market. Signals will come, especially when we are not looking for them.

The SPX moved above 200-day moving average last year after making a higher low - DOH!!!

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Happy Easter and Passover.
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