A disappointing jobs number did not hold back the market for long. We continue to see buyers step in just as the Fed’s POMO begins. The NASDAQ was held back today by CSCO reaction to its disappointing earnings release. CSCO CEO Chambers really did not have an optimistic view heading into the next quarter and the stock was punished holding the NASDAQ back in the process. Volume was mixed on the day as it dropped on the NYSE and picked up steam on the NASDAQ. We can thank CSCO for the uptick in volume. Tomorrow’s option expiry will inflate volume figures. Today was a nice day overall for the market and we continue to melt higher.
Price action is certainly telling us the path of least resistance is higher. Sentiment continues to reflect the bullish nature of this market. The only survey in extreme is the II survey. AAII Bulls dropped below 40% and the Bears jumped to 27%. NAAIM survey did show at least one manager go 100% short. The indexed of Active Money Managers still is above 80% long. We can see these conditions last for quite some time before this trend changes. It is anyone’s guess and why you should follow Big Wave Trading.
Janet Yellen testified today and what we heard was essentially what we already knew. She is going to continue to print till the cows come home. It will take GDP growing at more than 4-5% to get QE to end. Unfortunately, it will take a miracle to get a $16T economy to grow at 4% annualized. We aren’t saying it can’t, but when you have the law of large numbers going against you will the situation is not in your favor. It won’t be the economy forcing the Fed to end QE it will be when confidence is lost in the program.
Enjoy tomorrow’s fireworks with options expiry. Ride your winners and cut your losses.
