Jamie Dimon headed to the hill today to testify regarding JPM $2 billion trading loss held up the broader market for majority of the day. Economic news took to the back burner as the market watched Jamie Dimon testify and JPM the stock rise. The rally would not last the entire day, but the close JPM closed well off its highs of the session. Just as JPM reversed its gains the broader market reversed closing just off the lows of the session. Volume was mixed on the day as the NYSE volume continues to be incredibly low while NASDAQ volume jumped on the day. Institutions are not active in this market and price action has been quite eratic. Day 8 of our attempted rally closed poorly and we continue to search for direction.
CNBC was able to pull itself away from providing useless commentary on Europe and focus on Jamie Dimon. However, it won’t take too long with Greek elections to dominate CNBC’s airwaves. At this juncture, price action on the NASDAQ continues to be bearish with very large reversals. Sellers continue to hit the market and inhibit the ability of the market to follow-through. We can only go on what has happened and not what will happen. The future is unknown and to guess where this market may be and bet on that view is insane. The price action is far from bullish and volume continues to show up on the downside.
Volatility popped today as fear crept back into the market. In addition, after today’s treasury auction bond yields dove lower as more and more investors are piling into US Treasuries. At this point, US treasuries despite all the fiscal problems we have remain a relatively “safe” investment. Of course, we have the ability to print money and pay our debts. The question is how much longer will bond holders continue accept payment from a devaluing currency? Don’t try to answer it; price will let you know when it is time to get in and out. Guessing does not give you an edge no matter how logical the “guess” sounds. Stick with price!
We will continue to enjoy the action and the developments out of Europe. Eventually the market will force the hand of politicians to do the right thing.