We closed out the first 6 months of trading of 2014 by closing mixed. Volume was lower, but it was due to the Russell rebalance inflating Friday’s trade figures. It appeared this market was going to close out June on a high note. However, sellers took control sending the market lower well off the highs of the session by the close. The NASDAQ was leading index on the day closing in the green while the Dow and S&P 500 closed in the red. In addition to the NASDAQ, the Russell 2000 finished higher. Today’s end-of-day selling did not trigger any warning flags as the final minute we say a rush of buying. We remain in an uptrend and even with today’s action we’ll stick with the current trend.
Given this is a holiday shortened week trading may not be as clean as we like. Volume certainly will be light as many are on vacation ahead of the Fourth of July holiday. Thursday we get the June jobs report another key item for Federal Reserve watchers. We will simply react to price as others fall over each other trying to come up with a thesis for their strategy. Just go by the price action of the market and individual stocks and ignore the noise CNBC et al will be spewing. Remember, they exist to sell ad dollars and not for you to make money.
Homebuilders initially moved higher after the housing report this morning. Unfortunately, like the rest of the market they pulled back from their highs of the session. PHM and LEN are two who fell back from their highs while XHB was able to hang onto most of its gains from the day. There are many who still doubt the housing market and homebuilding stocks. It is easy to disregard the group because of the lack of first time homebuyers. Where the industry is seeing the first time homebuyer is in areas where there is growth. Is it not funny how growth induces first time homebuyers? The bottom line is home building stocks are poised to move higher.
While today wasn’t the greatest of days it wasn’t a turning point in this uptrend. Stick with this trend until it ends.
