Once again the market was dealt with less then stellar economic data. PPI and Retail sales were disappointing with Retail Sales at an unadjusted rate of -9%. Early in the trading session, but once again buyers were able to use the newly found liquidity from the Federal Reserve to push the market higher into the close. AAPL moved lower after getting an initial boost from earnings, but failed to hang onto gains. However, the focus now shifts to the Federal Reserve and its policy statement being released at 2pm Wednesday afternoon. Fight this trend at your own peril; we’ll keep riding it higher.
Tomorrow will be full of fireworks after 2pm with the Fed on deck. Last Federal Reserve meeting Big Ben came out and said “no” to taper. Market pundits were quite surprised by the move and the market raced to new highs. Unfortunately, the looming government shut down came along and likely tempered bull’s expectations. Whatever the reason we do know in the short-term the Fed policy statement set the high. After October’s mess in Washington DC there is almost NO chance the Federal Reserve tapers and it wouldn’t surprise me if we see them hint at even increasing the amount of bond buying. Right now, despite the S&P 500 being positive 13 out of the last 15 sessions we are in an uptrend. No need to guess when to get off.
Back to the Point and Figure charts still show this market should move higher. Of course we have our exit rules, but using his old charting method our trend should continue moving higher.
Tomorrow is really going to be the day where we see a lot of movement. Keep in mind, even with the current rally the Dow Jones Industrial average has yet to set a new all time high eclipsing September’s high. It may not mean anything, but tomorrow it’ll be interesting how the index reacts to the Federal Reserve.
Remember, if you are worried over a position it is likely your position size is much too large. Stick with the trend!
