Stocks fail to add to Tuesday gains as Bernanke fails to deliver inspiration to bulls. Bernanke did not hint at another round of Quantitative Easing and market participants did not take well to the news. Throughout the day the market held near the highs of the day with a few leaders tacking onto their gains. Unfortunately, after 2:30 pm EST the market had concluded Bernanke was not going to announce another round of QE as next week will see the end of QE2. Falling to the lows of the day the market gave back a good chunk of Tuesday’s gains. Not quite the action we would want to see after a good day in the market. The market still remains questionable, tread carefully.
Many of us were able to grab a few longs in the market yesterday, but one thing we did not do is plunge. We understand our odds and the odds were we would see a bounce, but it would have a high probability of failure. It is important to understand where the market is at and more importantly how leaders are acting. Right now the leaders are coming from the Medical industry telling us we are in the VERY LATE STAGE of this bull market. Not to mention, as I have noted many times we are in a seasonally difficult time in the market. Mix it all together and you get one tough market!
Tough markets are a part of stock market trading. IBD has noted the 3rd year of a bull market is likely to return only 3%! This spells a lot of chop and slop ahead for the market. It also means we must be quick with cutting losses and taking profits. We are not likely to see HUGE gains from individual names. Therefore, we must rotate our capital into stocks making gains not sitting idle.
Make sure you keep your powder dry because at SOME point this market will emerge and produce a bull market. You must stay on top of the market. Cut your darn losses, will ya?
