Markets continue confusing most investors. It was only on Friday everybody was utterly bearish. Today the inverse is taking place as people chase stocks higher in poor liquidity. The SPX has basically not gone anywhere over past month, but as it dances around the 200-day average, it continues frustrating investors, especially the ones trying to play some kind of momentum.

SPX is once again above the 200-day average, but we would not get overly excited on the upside until there is a proper breakoff the 2810 area. The same goes for the downside, where the big level to watch is the 2700 level.

NASDAQ outperforms most indices today and is once again very close to the big resistance level, around the 7200 level, but playing momentum seems an expensive game here.

Several of the (ex) big sentiment names are surging today. One of those is Apple. It is up almost 6% in 2 days, and getting an extra boost today by a BoFa upgrade. Note the stock is trading above the 100-day average for the first time since mid-November.

Playing “strong directional” views and momentum is most probable a bad idea. Stick to managing your risk properly, as we await a possible break out. The only question is, will we eventually break up or down?

Source, charts by Bloomberg