Volume Disappears as Stocks Recoup Majority of Monday Losses

In fine QE fashion stocks rebound in very light trade. Positive housing data did help the market even though growth came from multi-family homes. Industrial production grew at a faster pace than expected. Today was the first time we had economic data come in better than expected. Sellers disappeared paving the way for the market to float higher throughout the day. Volume disappeared falling more than 20% on the NYSE and 15% on the NASDAQ falling right in line with QE trading. Our uptrend remains in place for now and we remain ever confident in our systematic approach. Gold and silver rebounded as well as many other commodities after Monday’s big decline. The decline in gold was a 7 sigma move! Either metal was unable to capture majority of losses like the Dow Jones, S&P 500, and NASDAQ. I for one would love to see commodities in general move lower. Lower prices of things we need like food and energy can only help those who don’t own assets benefiting from the Fed’s ZIRP and QE. Lower prices for commodities continue to be highly probable and who can’t smile at lower prices at the pump? Earnings after the bell failed to inspire buyers. INTC closed the after-hours session higher by .71%. However, INTC was up more than 3% after reporting earnings. YHOO pushed higher initially after reporting earnings but the stock fell 4% by the end of the after-hours session. CRUS released earnings disappointing the street finishing lower by almost 11%. We’ll see what tomorrow brings for these stocks and the rest of the market. Tomorrow we’ll get the release of the Federal Reserve’s Beige book. There are few speeches tomorrow by Fed members and likely get a few headlines. Outside of the Beige book it is a relatively quiet day in terms of economic news. Before the market open we’ll get earnings from BAC and we’ll see if the stock follows C or GS. BAC has been a leader in this rally and has been an important piece to this rally. If this market can build upon today’s gains it will bode well to recoup all of Monday’s losses. Of course, we’ll follow our strategy and follow price. Cut those losses.