Talk about an undefined market. For four of the past five days, the closing range for the S&P 500 (SPX) has been 13.6 points. This is 2/20 of 1% based on the price of the index. For the Nasdaq, the four-day range is 14.76 points, or eight-hundredths of 1%. The range for the Nasdaq 100 (QQQ) is 0.83 points, or two-tenths of 1%. NASDAQ and QQQ have tested their 21-day exponential value several times and are still in danger of breaking their average, while SPX has approached the average several times during the day. Q3 EPS season begins this week with PEP, INFY, DAL, JPM, WFC, PGR, BLK, and BK all releasing reports. The big financial results will take place over the weekend and into next week. The next three weeks will be very busy with earnings reports. Immediately before and after earnings announcements, companies enter a blackout period. During that time, companies cannot buy back their own shares. Therefore, there may be no demand from April to early May, July to early August, October to early November, and January to early February, and the overall market may become weak. The S&P 500 had $237 billion in share buybacks in the first quarter of 2024 and $817 billion in the 12 months ending March 2024. Currently, share buybacks are subject to a 1% sales tax, but the tax rate could rise further as they are an attractive source of funding for governments. Currently in a seasonal slump, the VIX volatility index is at 22.6%, up from 15% on September 26th. This indicates that option traders are betting on increased volatility by bidding on the option price. This is common before presidential elections. (Mark Arbetter, CMT)
