An early morning sell off as pending home sales disappointed did not last long.  Buyers and we use this term loosely came to the market’s rescue pushing the market back near Friday’s closing prices.  Crude oil was a hot topic as the commodity briefly traded below $80 a barrel.  Small caps lagged on the session with the Dow Jones Industrial Average led the gainers with a measly 12.53 point gain.  Volume ended mixed as NYSE exchange volume rose and NASDAQ fell.  At this point the market is consolidating its gains from last week pretty well at the moment.  However, the two day Federal Reserve meetings concluding on Wednesday will likely a catalyst for the market moving forward.

All eyes will turn to the Federal Reserve on Wednesday when they announce whether or not the current round of QE will end or not.  There is a great chance the Fed will end QE on Wednesday as they have telegraphed this move for quite some time.  Nearly two weeks ago when the market was heading lower BulTard came out and said the Fed could extend QE.  His statement helped push the market back to where we are now, but was he simply trying to stop a market selloff?  If we do sell-off on news QE is indeed ending how long before rumors of a new round of QE emerge?  We prefer this market to continue to digest these gains if we are going to move higher.  However, given Fed days bring on big moves we may not get what we wish for.

In our chat room we continue to talk about the level of confidence new traders have in this market.  Most of these traders we see were not around for 2007-09.  Stocks do not always go up and just buying the dip does not always work.  Yet, if you read what these traders are bloviating about you sure would think so.  Luckily we know better and have been through uptrends and downtrends.  We cut through the crap and get right to what matters:  price.  When we do have a sizeable correction and buying the dip crowd gets wiped out we will still be sitting here taking advantage of this market.

It was nice to see crude oil trade below $80 a barrel.  Too bad it did not move lower.  Pretty interesting to see crude oil continue to push lower.  We know alternatives are picking up, but are they taking that much away from oil?  Or is the global economy slowing?  An interesting notable statistic is the S&P 500 since 2009 has grown more than five times than GDP.  If crude continues to push lower what does that mean for GDP?

A decent start for the week, but we have a lot more coming our way.  Stick with the game plan.