01.24.2012

Equities Shift

01.24.2012

Much of January has been systematic in nature vis-à-vis U.S. equities. Generally, the markets open with major indices immediately dropping then slowly running the bid higher until the close, where indices are either up a few points or flat.

On Tuesday, the pattern changed slightly with volatility jumping nearly two points. The S&P 500 and Dow Jones Industrial Average closed in the red as traders laid in wait for an economic catalyst to drive the market higher or lower. For now, the Q4 earnings game has remained the dominant theme.

Apple reported a monster quarter on Tuesday, smashing through analyst estimates. With a 15% weighting in the Nasdaq Composite index, the market will follow suit and will drive technology stocks higher and higher.

Traders discussing earnings and the week’s outlook on Twitter agreed that Apple’s quarter would most likely act as a bullish catalyst for driving the market higher. Unless the Federal Reserve announces a radical change in monetary policy, that looks to be the case.

Related articles

  1. SEC 'Dark' Proposals Assessed

    With Zoe Zhang and Richard Knight, Execution Quant Group, CLSA

  2. APAC buy-side traders are increasingly requesting the conditional order type.

  3. Recent downturn has shifted market from retail-heavy participation to more systematic/quant influence.

  4. FCMs Promote Algorithmic Trading

    The new capability allows pre-market block trading at the full day VWAP price.

  5. The iconic Big Board processes a half trillion messages per day.