A disappointing Empire Manufacturing figure did not sway buyers from pushing stocks higher today. The dollar took a breather from its current run as Crude Oil ended the day with a 43 handle. Volume was light, but it is typical for Monday’s to see light volume. It is not out of the ordinary. After Friday’s dismal session it was nice to see the market have the ability to rebound. Now, the bulls will need to see some follow-through here and not what we saw on Friday. Distribution still isn’t a problem yet, but another couple of days of heavy volume selling will certainly be an issue for this market. Until then, it is steady as she goes.
It was certainly nice to see this market rebound from Friday’s near devastating session. We would have liked to see volume swell it was still nice to see the price gains. Money certainly came back into the large cap stocks with the Dow and S&P 500 leading the session. Small caps and the NASDAQ lagged, but we have to remember the Russell 2000 sits just below its all-time high. Rotation is will happen and if Small caps hit a new high confirmation from another index is always a healthy sign. Again, a little follow-through here will go a long way for this market.
Crude oil dropped despite the dollar falling. The commodity continues its long-term trend even despite appearing to have had a bottom in place. Energy stocks did not follow the commodity lower. However, many energy stocks still have not found a bottom themselves. So much for bottom fishing energy stocks. It won’t stop many from trying however.
As for the dollar it simply took a breather from its recent uptrend. We have been on the stronger dollar for quite some time and eye potential impacts. Of course price will always come first with the reason coming second. Whatever the reason for this drastic rise outside of the ECB and the Japanese Central Bank actions will certain show itself at a later date.
Today was a pretty good start to the week. We will see if this can continue and avoid further distribution. Stick with the process.
