From the Trading Desk

GOOG Soars past $800 Stocks Lift to New Highs on Light Trade

The market is able to shrug off a dip in homebuilder sentiment and move into new highs on the year. Small caps continue to lift despite ultra light volume in the IWM tracking ETF. Volume on the day was below Friday’s option inflated volume. NYSE composite came in second adding 73 basis points boosted by Oil and Gas sector followed by Utilities. High gas prices and higher payroll taxes appear, for now have yet to cause any impacts to consumer spending despite WMT internal memo leaked on Friday. Our uptrend remains and we are going to continue to stick to it until we see evidence to suggest we are going switch gears.

Volatility continues to be compressed as this market continues to push to the upside. Fears of any shock in the market have subsided as we have yet to see any major hurdles arise. We have our exit strategy in place so we do not fear any move to the downside. However, it is interesting to see how much volatility has compressed since this market has pushed higher. There isn’t any fear out there. Whether that translates to further upside or not remains to be seen. We have our uptrend and are operating as such. Until we see distribution piling up and leading stocks breaking down then we’ll switch gears.

Tomorrow we’ll get the FOMC meeting minutes. The central bank has its work cut out for it trying to navigate the QE waters. Ben Bernanke has committed to an accommodative monetary policy for the United States. The Fed has pumped trillions of dollars into the market and trying to exit this strategy will be extraordinary difficult. How do you remove an addict from its preferred drug without causing the maximum pain? Perhaps we should accept the pain as temporary? Very interesting to see how this all plays out. For us Trend Followers price action will dictate how we react.

Distribution remains elusive and with the market continuing to make new highs without any institutional selling is not a recipe to sell. We’ll let the market come to us rather than predicting where it will go next.

Short-term Trends

TICKER ST TREND TREND CHANGE DATE CLOSE %
SPY UPTREND NO CHANGE 2/19/2013 153.25 0.75%
IWM UPTREND NO CHANGE 2/19/2013 92.55 0.88%
QQQ UPTREND NO CHANGE 2/19/2013 68.24 0.72%
USO DOWNTREND NO CHANGE 2/19/2013 34.96 0.69%
UNG DOWNTREND NO CHANGE 2/19/2013 18.30 2.92%
GLD DOWNTREND NO CHANGE 2/19/2013 155.33 -0.28%
SLV DOWNTREND NO CHANGE 2/19/2013 28.44 -1.35%
DBC UPTREND NO CHANGE 2/19/2013 28.24 -0.39%
FXY DOWNTREND NO CHANGE 2/19/2013 104.77 -0.02%
FXE DOWNTREND NO CHANGE 2/19/2013 132.81 0.19%
TLT DOWNTREND NO CHANGE 2/19/2013 116.5 -0.50%

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