From the Trading Desk
It all began in Japan where the Nikkei hit an all-time high only to end its day lower down by more than 7%. Selling swept the globe where Europe was hit hard, but it was the United States market to see some resiliency. A better than expected Jobless Claims figure did help the mood, but [...]
It was about time we saw the market close lower on heavy volume. At one point the Dow Jones Industrial Average was up more than 155 points. The market was clearly focused in on Ben Bernanke’s testimony and prepared comments then it would turn its attention to the release of the Fed’s meeting minutes. Hints [...]
Void of economic releases the market did get showered with more than $3 billion in asset purchases from the Federal Reserve. A hiccup in the morning was quickly support as the Federal Reserve Open Market Operations flooded the market with fresh new cash. Over Europe the DAX closed in the green for the 11th straight [...]
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Stocks Rally on Higher Volume as the Fed Releases its Beige Book
Homebuilders and Financials lead the market higher as traders shake off the impending disaster facing Europe. Buyers stepped up their operations in the early going and continued with them until the one o’clock hour. Heading into the release of the beige book the market turn a turn lower fearing what the Fed may or may not say. Volume rose on the day, but failed to explode higher. After the release the market was able to find its footing and push to the highs of the day closing at the highs. Day 3 of another attempted rally produced a follow-through day and we’ll now adjust and act accordingly. While this day could have been better it certainly wasn’t all that bad.
June follow-throughs are not likely to succeed. Only one has been successful and that was June of 1992. Odds are not in the bulls favor here as we continue to push forward. It wouldn’t surprise me to see distribution hit the market sooner rather than later with the macro picture. Given the current price and volume action of the market it appears the market is poised to push higher and it is prudent to follow.
There were a few leading stocks pushing higher, but many of them had huge price gains today. It is hard to get into a stock after it pushes 5-10% higher in one day. This isn’t 1999 when a jump of this magnitude was the norm. Unfortunately, the type of market we saw in 1999 only comes around once every few generations. It would be nice to get a new crop of leaders to show us this rally attempt has some legs behind it. It isn’t out of the question this market can’t climb back to its 50 day, but gaming where the market goes will be fruitless. Follow price.
A rally does appear to be underway and how far and long it will go is anyones guess. Allow price to be your guide! Cut those losses short.