Stock Market getting Rocked today

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On Monday traders found themselves in a downward trending market on amid further speculation on the Fed taper timeline. The market was under pressure all day long as traders and investors took an opportunity to trim risk as Atlanta Fed President Dennis Lockhart commented on the future of the Fed’s bond buying program. Lockhart stated that the Fed intended to continue the taper of QE likely surprising investors after the dismal employment number on Friday.

All major indices are trading lower right now and are sitting near session lows. With the next earnings cycle starting this week we would expect the market to pause after a sell off like this until it finds some direction on earnings. There is also a decent amount of economic data on tap for the week with retail sales numbers being released tomorrow and housing data on Thursday and Friday. We believe that if this really was a panic sell off we would be seeing a larger reaction in the VIX. Currently the VIX is up around a half a point on the day and is still holding well below 13. We remain to be long this market but slowed the pace of new longs and took a chance to exit some old longs. We believe that earnings will be in line with expectations if not better and that the market will resume its trend higher in the near term.

Andrew Keene

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