The release of retail sales disappointed with big negative revisions for the prior month. Despite the negative release stocks were able to hold up relatively well. Homebuilder confidence came in just a tad under expectations, but in line with last month. Not the inspiring economic data the Fed would be looking for to raise rates. Even with volume inching higher it is well below normal as many await the conclusion of the most recent FOMC meeting. Tomorrow should prove a bit more active than today. We remain in an uptrend even with the light. Until we see a reversal our expectations are for this market to continue to climb higher.
Many will want to doubt this rally due to its low volume and leadership from utilities. There is a high probability that we will turn over as we typically do not want defensive sectors leading the way. The S&P 500 and Dow Jones are flirting with their 200 day moving averages while the NASDAQ and Russell 2000 remain well below theirs. This is an important junction for the market and could very well determine if we will continue to move higher or simply head back for February lows. We will allow our model to work using our signals to take advantage of what the market will give us. No need to be a hero and press too hard. Stick with the plan.
Tomorrow’s release of the FOMC statement will be heavily scrutinized. There is a very good chance we will not read a single paragraph of the statement. We will certainly see headlines, but that is about as far as we’ll go with regards to the statement. The action will be much more important to us than whatever central bank has to say. Stick with the process and ignore the noise spewing from Wall Street. It will do you a huge favor by sticking with price.
In positive news AAPL continues it march towards its 200 day moving average. The bad news is volume is nearly non-existent. While there have been days where volume is above the prior day, but we have not seen massive accumulation. Volume should be above the 50 day moving average showing institutions are accumulating shares. At this point, all we see is a light volume move in a laggard name.
We will be keen on tomorrow’s price action, but it is no different than any other day. Sure, volume will likely spike and we may see more volatility. However, at the end of the day we simply focus on what is important to us. Shield yourself from the noise and execute relentlessly!
