From the Trading Desk
It was about time we saw the market close lower on heavy volume. At one point the Dow Jones Industrial Average was up more than 155 points. The market was clearly focused in on Ben Bernanke’s testimony and prepared comments then it would turn its attention to the release of the Fed’s meeting minutes. Hints [...]
Void of economic releases the market did get showered with more than $3 billion in asset purchases from the Federal Reserve. A hiccup in the morning was quickly support as the Federal Reserve Open Market Operations flooded the market with fresh new cash. Over Europe the DAX closed in the green for the 11th straight [...]
Heading into the week the US market once again watched the Nikkei continue to move further into the stratosphere. Futures were pretty anemic heading into the trading session today. Overnight news focused on the plunge in precious metals as Silver and Gold were hit hard. Despite the negative open and sentiment both precious metals were [...]
Copyright © 2013 · Minimum Theme on Genesis Framework · WordPress · Log in
Columbus Day brings Light Volume
Stocks close flat as holiday trading leaves volume on the light side
Holiday trading dominated today’s market with volume coming in very light as stocks closed flat. Much of the talk on the street surrounded another round of QE by the Federal Reserve Bank. The market did not get any economic news today giving relief after Friday’s job report. Key psychological levels were held today as the Dow Jones Industrial average held its 11,000 market and the NASDAQ held 2400. While these aren’t ultra-important it is still a positive signal the market is able to hang onto the levels. A day like today is simple consolidation of gains and given the Columbus Day holiday we are holding up nicely.
Once again the cloud computing stocks look weak once again weighing on technology stocks. The cloud computing space is far from over, but the stocks are signaling a time to base. The move last week certainly signal weakness to come and today was just another example of why when you see a stock suffer heavy volume selling through a major moving averages you need to sit up and take notice. Much like AKAM stock dove through its 50dma with heavy volume selling it is time to step aside and wait for another proper base.
There are still many doubters in this market and are citing overbought conditions. And while it is hard to argue that we may look overbought these conditions can last for a long time. This past year saw overbought conditions last over a month beginning in March of this year. It wasn’t until the end of April we saw the market crumble lower including the FLASH CRASH! Until we see further destruction from market leaders and major distribution will this market turn into a new correction.
This week we do see more economic data to be released, but our focus will be the action of the market rather if we miss or beat an expected economic figure. This week will be interesting as Friday is an options expiry Friday. Just as interesting was the move in the VIX today as volatility took a nose dive today even as the S&P 500 spent time in negative territory. We can try to make two cents of the move, but it clearly is showing weakness in the index and positive pressure for stocks. Keep it simple, over analyzing a move will only cloud your judgment.
Even with cloud computing stocks taking a hit, this uptrend remains intact and strong. Until we see any further weakness and stocks to get long we’ll stick to the long side. Fighting a trend is not something we practice. Remember, always cut your losses short.