Headline durable goods orders disappointed, but pending home sales excite buyers. The Dow Jones Industrial Average recouped Monday’s high while other indexes close just below. Volume dropped 10% from Tuesday’s level suggesting institutions weren’t out accumulating shares as fast as they were selling on Monday. Our model is still in neutral mode, but today’s action certainly can tip the scales in favor of a bullish outcome. Ben Bernanke was on the hill once again promising QE would stay in place for a very long time. Tomorrow we’ll get another read on GDP and one day closer to the Sequester.
Volume over the past few days has fallen since Monday’s big volume decline. Distribution has ruled over the last week, but with today’s price move it calls into question whether or not volume will matter. Normally, if you have this level of distribution price will not follow. Perhaps endless QE and HFT have created a situation where they have completed neutralized selling. We can’t control either we can only control what we trade, how much we trade, and when we exit. It is unfortunate the current situation has skewed supply and demand in charts, but it is the situation we have been dealt.
At the moment given the price action one can conclude the Sequester does not matter to the market. The Federal Reserve is printing $85 billion a month out of thin air as far as the eye can see. The Sequester equates to one month of the Fed’s bond buying program. Any new taxes in a sequester deal may be a killer, but for now the Sequester is just a pebble on the road the market is traveling over. It is all noise.
Tomorrow will have some fireworks once again with a lot of economic data. Stay disciplined and cut those losses short.
TICKER ST TREND TREND CHANGE DATE CLOSE %
SPY UPTREND NO CHANGE 2/27/2013 151.91 1.26%
IWM UPTREND NO CHANGE 2/27/2013 90.31 1.05%
QQQ DOWNTREND NO CHANGE 2/27/2013 67.24 1.02%
USO DOWNTREND NO CHANGE 2/27/2013 33.40 0.21%
UNG DOWNTREND NO CHANGE 2/27/2013 18.82 -0.84%
GLD DOWNTREND NO CHANGE 2/27/2013 154.57 -1.06%
SLV DOWNTREND NO CHANGE 2/27/2013 28.01 -1.41%
DBC DOWNTREND NO CHANGE 2/27/2013 27.25 -0.62%
FXY UPTREND NO CHANGE 2/27/2013 106.34 -0.20%
FXE DOWNTREND NO CHANGE 2/27/2013 130.33 0.59%
TLT UPTREND NO CHANGE 2/27/2013 118.64 -0.30%
