Today’s volume was non-existent as many index ETFs saw their lightest volume of the year! This entire rally has been built on light volume, but we know over the past few years light volume really has not mattered to the market. Crude oil settled lower as the move from the ECB announcement has faded. The good news for the market is we have shaken off overbought conditions and continue to push higher. This market should not move too much ahead of the Fed as many will wait for the announcement to make a move. It would be nice to have this market consolidate a few days as we are now in an operational buy mode. We will continue to execute our process regardless of what market pundits may say. Stick with the trend until it ends!
The market rally off the February lows has been quite impressive. Volume aside this market has been able to shake off a lot of bearish sentiment. We can certainly point to the light volume, but many who have missed this rally. There are not many opportunities to take advantage where we get a decent rally. We have been taking long signals and even though leadership is thin we did not miss out on this rally. Stick with us and we’ll help you navigate the stock market waters.
Given the ECB’s stance and move into furthering their rate cuts into negative territory the Fed is certainly in an interesting position. The economic data has not been too bad and with the Jobs data (crooked or not) is on the face of it decent. Pile on top of that the rise in crude oil prices will certainly put pressure on inflation expectations. Most do not expect the Fed to raise rates on Wednesday, but it will be what they say many will be concerned with. The beauty of our system is we react to market action. We never under any circumstance guess at the direction of the market and invest in accordance to this guess. We will stick with our process and let the pundits trip all over themselves to be right.
No one knows where this market is headed. No matter how sophisticated the commentary may sound it is impossible to guess where we’ll head next. Keep grinding.
