The morning kicked off with the VIX hitting 6 month lows and a BAC downgrade. BAC was unable to recover from the downgrade, but the VIX was able to lift off its lows. Market leadership continues to act well despite the market’s consolidation. We continue to see the leadership perform well giving us the indication higher prices are ahead. Natural gas continues its decline showing how powerful trends can be in either direction. The dollar index looks poised to push higher from here with a series of higher lows and higher highs. Leading stocks and the market’s price action continue to support higher prices for this market in the short-term.
There are many in twitterverse, blogosphere, and CNBC who claim to know where this market is going to head over the course of many timeframes. Short, intermediate, or long term time frames there is not a shortage of market pundits telling us where the market is going to hit. No one knows the future and to rely on predictions of someone on television is simply a fool’s game. Have a game plan and disciplined approach to the market is sure fire way of succeeding in this market.
BAC downgrade sent the stock lower on big volume finding support near the 20 day moving average. The stock weighed heavily on the financial sector pushing XLF lower for the day. Financials weighed on the S&P 500 as the index fell behind the Dow Jones Industrial Average and the NASDAQ. BAC has been a leading stock in this rally and so far is simply a blip on the radar at the moment. If the stock continues to move lower along with other leading stocks we’ll have an issue on our hands.
Tomorrow before the bell we’ll get a rate announcement from the ECB. Surely a rate cut would signal further economic weakness for the Eurozone I’d assume the market would cheer the news. Again, we do not have a clue what the market will do and we’ll only act if our signals are produced.
Our uptrend remains and looking like we’ll continue higher.
