From the Trading Desk

Industrials hit more Highs but Volume Drops again

For the 7th straight day the Dow Jones Industrial Average closed higher. Volume fell across the board, but this is normal for this uptrend and Mondays. VIX fell to new lows as buyers continue to show extreme complacency. AAPL reversed off its lows in the afternoon pushing the NASDAQ to new highs on rumors of a “plan” for their cash. The stock is so beaten up any rumor will force shorts to flee for the hills. The Yen and Pound continued their declines as both currencies appear to be racing towards zero. Although it appears the Yen will likely win this race. We aren’t surprised by new highs and we’ll continue to operate on the long side of the market.

There weren’t too many negative signs in the market other than the extreme light volume. NYSE volume was extremely low and you have to wonder where the institutions are. Where did they go? KORS a leading stock dropped below its 50 day in high turnover. The stock has continued to struggle after reporting earnings. SLCA issued a secondary after the bell and this leading stock will need to prove it can absorb the excess supply. The Fed’s money printing has seemingly put a floor in the stock market and any downside will be limited. However, we know better and we will continue to work our process.

Wednesday is a big day for the markets as we get a reading on February advance retail sales. Many have made a big deal over the pay roll tax increases. WMT stock price has ignored the internal memos regarding sales. TGT has broken into new highs despite consumers having to deal with higher taxes. It will be most interesting to see how the market reacts to the release.

Friday’s job report was finally a good sign, but we’ll need to continue to see jobs created a large pace. Unfortunately with the Federal Reserve printing $85 billion a month and continuing ZIRP. At some point either the Fed or the market will stop QE and ZIRP. We need a healthy economy without endless money printing.

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