MLR - PMP 3/30/15

Published : March 30 2015 at 8:34 ET

​Major averages rose on lower volume. The bounce so far has been anemic showing institutions remain reluctant to invest more fully in the current environment. The S&P 500 and DJIA both remain under their respective 50-day moving averages. The NASDAQ Composite bounced at a logical support point but the higher number of distribution days compared to accumulation days is a red flag.

Adding to the market's troubles, fourth-quarter GDP came in weaker than expected at 2.2%. The report also showed that quarterly corporate profits over the same period fell for the first time since 2008. Markets reacted negatively then stabilized.

The zig-zag go-nowhere action of the major averages over the last 4 months is troubling as the markets are expressing a form of exhaustion. Should markets start to undergo a real correction, and not one of the 5% variety, this could force the Fed's hand into launching QE4. We remain patient and vigilant as opportunities in individual stock rather than ETFs continue to present themselves.

This morning futures are up sharply after dovish comments from Fed Chief Janet Yellen on Friday afternoon and People's Bank of China Governor Zhou Xiaochuan Sunday. After last week's bounce off the 50-day line by the NASDAQ, the market was set up in a logical position for a rally attempt, and with the last two days of the first quarter upon us a continued bounce is not surprising.

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