From the Trading Desk

Stocks Climb off the Lows as Volume Climbs and Europe Woes Continue

Futures weren’t off to a great start with GDP readings around the world disappointed. Despite Central Bank’s efforts to kick start growth has failed around the world. Jobless claims came in better than expected, but figures from Connecticut and Illinois were estimated due to the storms. Buyers stepped up immediately at the open to support the market at the lows, but were unable to send the market well into the green territory. Maybe we can break through resistance tomorrow. However, at this point this market continues to bump up against resistance. Our uptrend remains and until we have evidence of a top we’ll remain in our uptrend.

Sentiment has backed off its recent highs as of late. This is not a surprise as it appears everyone continues to expect some sort of pullback. The market does not move in straight lines and we do expect some sort of pause. What most people will do is to try and anticipate these pullbacks and miss the upside. Why miss potential upside? If you know your exits and stick to a sound system there is no reason to miss any upside. Sentiment is not a timing tool and although it can help spot a turn in the market it isn’t a perfect indicator.

Tomorrow is options expiry and will user in a boat load of volume. We have had quite the volume and if we can’t push higher this week will look like churn. Churn is simply a lot of volume with very little price movement. It isn’t distribution, but could be a signal of market weakness. Most important thing to do is to watch your stocks. If you are getting a lot of sell signals it is likely a sign the market has become unhealthy. We haven’t quite seen this yet, but if we do we’ll be able to act accordingly. If this market can close at the high end of the range and even above last Friday’s high will be a good sign for this uptrend.

Short-term trends:
TICKER ST TREND TREND CHANGE DATE CLOSE %
SPY UPTREND NO CHANGE 2/14/2013 152.29 0.09%
IWM UPTREND NO CHANGE 2/14/2013 91.71 0.25%
QQQ UPTREND NO CHANGE 2/14/2013 67.95 -0.03%
USO DOWNTREND CHANGE 2/14/2013 35.27 0.23%
UNG DOWNTREND NO CHANGE 2/14/2013 17.84 -3.67%
GLD DOWNTREND NO CHANGE 2/14/2013 158.35 -0.44%
SLV DOWNTREND NO CHANGE 2/14/2013 29.46 -1.04%
DBC UPTREND NO CHANGE 2/14/2013 28.47 -0.14%
FXY DOWNTREND NO CHANGE 2/14/2013 105.68 0.79%
FXE DOWNTREND CHANGE 2/14/2013 132.52 -0.63%
TLT DOWNTREND NO CHANGE 2/14/2013 115.79 0.91%

Two changes in trend. FXE and USO have changed in our short-term trend model. It will be interesting to see how these turn out.

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