Rebounding from Monday’s sell-off stocks were able to close higher. Volume fell across the board despite the gains. Better than expected economic data did help kick off the morning, but sellers took to the market early and often pushing it nearly too breakeven. Sellers simply did not have enough ammo to push the market back into negative territory and pushed back to the highs of the session. The lack of volume certainly shows the lack of interest among institutional investors, but we have seen this story play out before. Today was Day 1 of an attempted rally and we’ll be looking for confirmation.
It is anyone’s guess if today’s rally will turn into a new rally and eventually new highs. It would have been nice to see huge volume surge into the market today showing institutions were putting cash to work. However, knowing we live in a QE/ZIRP world anything is possible. It is best to stay on top of stocks that outperform in this current environment as they are likely to be the ones leading if this turns out to be a bottom.
Tomorrow’s GDP report will certainly kick hyperbole into high gear over at CNBC. The financial media will likely make leaps of faith on what the Federal Reserve will do with this current GDP report. Consensus is for first quarter GDP to grow at a 2.4% annualized rate. It is anyone’s guess which way the market will go and even if we surmise a better than expected GDP will signal the Fed will taper and will be a negative for stocks. Is this guess a guarantee? We know we have an attempted rally within a downtrend and until we have evidence of this changing we’ll let price dictate our actions.
Enjoy the fireworks tomorrow morning!
