Better than expected GDP and Pending home sales helped boost the stock market in the early going, but the rally appeared to stall out after lunch time. Heading into the 3 o’clock hour it appeared the market was ready to rollover into oblivion and then rumors started to fly. Obamacare would be struck down with a 6-3 vote by the Supreme Court justices. A big blow to Obama, but a positive for the stock market or so it’s perceived. Volume ended mixed once again with NASDAQ volume higher and the NYSE lower on the day. The close wasn’t stellar again for the second straight day with the market unable to hang onto the highs of the day. Some positives as we did close higher, but we remain in sell mode until the market can prove an uptrend can be sustainable.
A few leading stocks sold off today, but two in particular were quite nasty. ORLY and CMG have been two stock market leaders for quite some time and their actions today are quite negative. Even MNST had a bad day, but CMG and ORLY were particularly ugly. This is not the type of moves you want to see out of your stock market leaders. AAPL has been relatively quiet over the entire month of June. AAPL was a major contributor for the early ’12 rally. Perhaps it is putting in a base, but for now the stock has yet to move. The picture of leading stocks is not as clear as we’d like and will continue to monitor.
Tomorrow we’ll get a reading on GDP. The market is looking for 1.9% quarter over quarter annualized growth. Let’s be honest, we have zero clue what the number will be. However, we can use the price action to our advantage and follow it. If the number is lower than 1.9% it would certainly have the market pundits getting after the fed to print more money. How will the market react then? It is useless to guess here and to position yourself solely based upon your opinion on the number is silly. Use price as your guide and leave the guess work to CNBC.
Stick to price and cut your losses.