S&P 500 ES futures continue to hold the 780 level as I felt they would in my market post last Friday. So where to now?
Tomorrow we have the mark to market hearing and on April 8 we will see if the uptick rule will be reinstated. These two events are being watched very closely by both bears and bulls.
This is just a hearing and a potential call to action. No doubt shorts would get fried on any positive announcement but until it is implemented, we aren't going anywhere.
There is nothing to really get excited about in the very near term nor to be fearful of. I am estimating that the markets will trade flat for the better part of April. For the S&P 500, I estimate it will trade range bound between 780 and 860 levels. The index has hit resistance from January that will be tough to get over. Contract volume has been declining steadily ever since the last recent bottom and I sense money managers need a catalyst before adding to their positions.
Year to date, the S&P 500 is down 11%. Last month the index climbed 8.5% in one of the best months ever. A pause is in order before the next leg up.
In other financial news
Mitsubishi and Mercedes announced record vehicle sales in Canada for March. However the news was different for General Motors which saw a 40% decline in year over year car sales for the month of March. For this year, General Motors of Canada has sold 53% less vehicles for the first quarter '09 compared to '08.
At least someone is doing its part in this recession. Retailer Kohls announced 19 new store openings with 11 grand openings today. Close to 3000 new jobs were created. Way to go Kohls.
Callaway (ELY) announced a $0.07 dividend to shareholders on record as of April 15, 2009. The stock is off nearly 60% from peak levels in 2007. Caution in the wind. Golf is an industry that is heading in reverse and its not wise to be a shareholder in this industry. Tight credit markets are not letting developers build courses and new golf course tracts. Golf equipment sales are sagging, and courses are closing. Great in boom times, but terrible in recessionary and "normal" times.
About Kerry Kobashi
Kerry is the founder of KerryOnWorld. He lives in Silicon Valley and has worked as an engineer and project manager. He owns Kobashi Computing a consulting company.
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Your ES 860 got hit today
The 780 to 860 ES move call was brilliant. Do you still think the rest of April is going to be flat? Before close it got rejected at 861.25 and backed off.
I noticed :O)
It would seem that after hitting 860 that we are going to churn a bit. ES could hover up in 818-860 area for days though as earnings come in. Over 1/3 of the S&P 500 is reporting this week so anything can happen.
818 area is good area for a bounce and likely happen on a pullback sometime in the next few weeks. I see ES closing around 840 this month.
Kerry is the founder of KerryOnWorld. He lives in Silicon Valley and has worked as an engineer and project manager. He owns Kobashi Computing a consulting company.