Early morning trading was decidely negative as the news of slowing Chinese growth hit the markets hard. In addition, Producer Price Index was higher than expected showing prices continue to push higher. The bright spot on the day, relatively speaking was the a jump in home builder confidence. Stocks slumped to the lows of the session, but quickly turned around mid-morning. Volume was higher on the day, but it was slipping heading into the final hour. Stocks simply were not to be denied and just after 3pm a news story from the Telegraph in London hinted at a proposed two trillion euro bailout plan agreed upon by France and Germany. Stocks took off and volume vaulted higher, but ended lower on the session. There was no doubts today was a follow-through day and we’ll treat it as such.
The story in the after-hours session was not YHOO stock or INTC stock, but AAPL stock. INTC stock had a great quarterly earnings report and the stock was rewarded in after-hours trading. AAPL stock was the real story as the company missed on earnings. The stock was down almost 8% at one point during the after-hours session. Just yesterday the stock was at all-time highs. We’ll likely see AAPL trade down to its 50 day moving average tomorrow. A rebound with support at the 50 day would certainly be a bullish development.
Tomorrow we’ll be getting Consumer Prices and it will likely show an increase in consumer prices. Crude oil today briefly touched $89 a barrel today and will likely continue to push higher if this market moves higher. If commodities push higher it will put a BIG squeeze on the poor and middle class. Inflation is a hidden tax and it hits the poor more than any other economic class. This European bailout fund can only get more money by taking it from Europeans or simply printing money. More than likely central banks will print money.
We are going to operate under the assumption the market is now in a confirmed uptrend. Today’s volume, although not ABOVE average it as big enough to confirm a rally attempt. At some point we’ll need to see volume come back into the market or this rally will not last very long.
What a week so far and we are looking for more!
