Once again stocks stage another bullish day on Wall Street as the market finishes in the green. Volume throughout the day ran hot, from the start it was running higher. By noon time volume was running 15% higher on the NASDAQ over Monday’s session. However, as stocks were unable to pierce opening prices volume began to sputter and drop for the remainder of the day. It appeared as if the sellers who were hitting the market did not have the power behind them. An interesting develop outside volume dropping was how the open of the day acted as a resistance point for the market. On several occasions stocks tried to pierce these intraday highs, but sellers were able to fend off buyers. Leading stocks once again were able to outperform the broader market suggesting there continues to be strength behind this move.
Over the past week it may appear I am repeating myself, or so it seems to me I am repeating myself. However, it is extremely important to zero in on what matters and clear out the noise. Leading stocks and price/volume action of our indexes are most important. Anything else are nice “tidbits” to have, but aren’t necessary to be successful in the market. There isn’t a holy grail (indicator) out there and yet we see so many who are searching for it. Nothing will ever be 100% Long Term Capital proved that. In the end, all that matters are the how the leaders are acting, price/volume action of the market, and finally how you deal with your portfolio.
Once again New Highs was over 600 and only 5 new lows on the NASDAQ and NYSE. Flash back to a year ago and we had the opposite occur where new lows continued to pounce on new highs. at the present time we have the opposite situation and this market appears it does not want to print lower prices.
Wednesday will be an interesting day as the FOMC will announce its rate decision at 2:15pmEDT. One thing that was brough to my attention was the amount of open put interest in the QQQQs and SPYs. It appears shorts are trying to pick a top here with huge bets against the Qs and SPYs. Does this mean we are going higher? Not necessarily, but if they need to get out there are only so many exits and will push the market higher. As I stated in last night’s commentary there is no need to fight the market trend and with the FOMC announcement expected at 215pmEDT those who are short might need find their way out.
Don’t find the trend and take it stock by stock. Keep those losses small.
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