Investors, beware of the Ides of March. Stocks are on the move down and The Federal Reserve is meeting.
While global equity markets have gyrated and then moved higher on the short squeeze created by ECB’s kitchen sink monetary “solution” last week, the run up appears to be coming to an end.
Well, the US indices jumped over the longer term moving averages on Mario Draghi’s easing, but now the retreat is happening. The S&P 500 is below the 2K level in the futures market and the Dow is close to breaching its 200 day moving average in early morning trading.
These are technical moves, which most small investors pay little attention to, but the black boxes residing at the exchanges operated by high frequency trading firms know it’s a signal to ping stocks with lower bids on a gargantuan level. Thousands of bids a second with a lower price than offered will lower the ask price on the shares, which when occurring millions of time a minute will move the indices lower.
There are too few humans to step in to correct the action on every stock, so that is why technical breaches like today are important to note.
Remember the Ides of March became notorious since 44 BC since it marked the date of the assassination of Julius Caesar.
“Et tu, Brute?” as Shakespeare would write. You too, investors beware.