A better than expected ISM Non-Manufacturing reading on the back of strong new orders helped push the market to the highs of the session. Volume expanded on the day a good sign for the markets as the NASDAQ had a follow-through day. AAPL reversed its downturn heading back to a key pivotal point. GOOG continued to power higher along with YHOO and AMZN. The last 30 minutes of trading certainly helped the NASDAQ as the final hour did not start well. It appeared sellers were going to take over and leave a big blemish on the day. However, buyers stepped up and saved the day. New highs across the spectrum and we are now back in uptrend mode.
The recent action was quite volatile and many were calling for a broadening top. Unfortunately, the pattern is not a great indicator of market tops and it was debunked today. Tomorrow may be a different story, but all we know is the market wants to continue to hit new highs. The market will turn to Friday’s job report for hints at an improving economy. At this point if anything points to the Federal Reserve pulling in QE will be bearish. Given the pathetic GDP growth one would conclude the jobs report will not be good and in turn bullish for the market. We are going to follow our process and execute flawlessly.
There is plenty of debate on where the market will head from here. We will tell you that we have do not have a clue if this will continue or not. All signs point for this market to continue higher, but there aren’t any guarantees this will be the case. Sure, endless QE should keep this market a float. Will conventional wisdom be right?
Remember, to cut your losses and ride your winners.