The markets opened higher today on the back of a solid Non Farm Payrolls number. Employment increased by 216,000 in the month of March. This was a perfect number for the markets as it was neither too hot, nor too cold. A much higher number would have meant a stalling out of QE2 while a much lower number would have meant possible QE3.
After the markets opened higher, the Dollar began to surge dramatically to the upside. As it rose, the markets fell, heading towards the flat line. At precisely 10am ET, the Dollar reversed course. The Dollar collapsed sharply lower, going all the way to the negative side on the day. As the Dollar shot lower, the markets moved higher, hitting the master SPY level of $133.65. As the Dollar fell more and more, commodities started to rise. Silver and gold had opened sharply lower but were now moving towards the flat line. Oil had opened flat and was now surging.
By the early afternoon, oil was nearing $108 per barrel and the markets were starting to get a little nervous. In the afternoon, the markets headed back down on worries about commodity prices. By the end of the day, the Dow ended +56, Nasdaq +8.5 and the S&P 500 +6.5. This was a solid up day but far of the highs because of oil.
Apple continues to show amazing weakness. While the markets were higher, AAPL ended -$3.95. This continues to be a story little talked about on Wall Street as long as he markets are floating higher. Intel also dropped today, -2.25%. The leaders were CVX, XOM on the back of oil as well as GOOG and IBM for tech.
COIN reported earnings after the bell yesterday. Earnings were very disappointing as the cash flow positive statement by the company in prior quarters appears to no longer be the case. This is a pure and simple example of management having no clue. Basically, they bit off more than they could chew, expanding far faster than they should have. By buying many new parts to their business that were not profitable, they expect to no longer be cash flow positive in the near term. Because of this, they needed cash and did an offering this morning. This is dilution to the stock. Luckily, the stock is priced at base line levels and only dropped 13%. Long term, the story here is huge, as we all know food is going to be in huge demand. However, in the short term, the stock will be stuck in purgatory until they have a good piece of news. It is still a long term hold in Chief Market Strategist Gareth Soloway's opinion.
There had been talk of picking up some SDS today. However, new money flow for the quarter may come in on Mutual Fund Monday and could help push the markets higher. However, if oil jumps again, that may have a limited impact.
Because oil took out the $107.00 level, the markets will be on edge on every tick up. If oil hits $110.00 per barrel, expect a little bit of a freak out. This will be a key even number.
The Dollar (UUP) briefly moved above the key $21.90 level in early trading, hitting $21.98. That was the major confirmation level tested many times this week. Again, it failed to hold and came crashing down. This is very bearish trading for the Dollar.
Gold saw minor losses today after opening with major losses while the SLV ended slightly higher after erasing early losses.
Continue to watch the news and Sunday night pay close attention to oil. This may be the cause of any move next week.