"Today Will Be The Test" For The S&P 500
38 year market veteran Kenny Polcari explains why he's watching today's trading carefully - and also offers a preview of what to look forward to in the week ahead.
Friend of Fringe Finance and well known financial news contributor - as well as 38 year veteran of markets - Kenny Polcari has been kind enough to share his most recent thoughts on the market with our readers.
I’ve been lucky enough to be friendly with Kenny for about a decade now, and he was the first guy to ever take me on what I can only describe as an unauthorized tour of the NYSE trading floor, where I got to personally tell several confused specialists and market makers that the Chinese names they were trading were frauds that didn’t even exist.
The tour didn’t last as long as I would have liked, to say the least. But I’ve always appreciated Kenny’s willingness to welcome people into his busy world for nothing in exchange, and his decades of experience, which gives you a pulse on markets that only time can help you recognize.
For those who aren’t familiar with Kenny or don’t recognize him from TV, he is Managing Partner of Kace Capital Advisors and Chief Market Strategist at SlateStone Wealth. He started his career on the floor of the New York Stock Exchange (NYSE) as an institutional broker back in the early eighties when the march of electronic trading was already taking its first steps, and the great bull was first learning to run.
The post has been lightly edited for punctuation and grammar.
On Friday morning I was on Varney & Co. at 9 am with Stuart Varney. During that block, I discussed how the Dow Industrials had not yet broken the June low (29,653 – on June 17th), but the Dow Transports had broken their July low (July was lower than the June low), and if Dow theory held true, then the Industrials must break the June low in order for the theory to be validated. Which, in the end, would signal more weakness ahead. Here is the clip from that appearance.
At 10:02 am on Friday September 23rd, the Dow Industrials breached that low, and it proceeded to tumble from there. The algos reacting to the technical signal sent wave after wave of sell orders into the market and that sent stocks into a tailspin.
Remember that when the algo’s get triggered, it triggers a two way reaction…