Tuesday, July 02, 2013
A Late Session Rally Lifts Stocks off the Lows
Another morning rally turned sour as sellers regain control. The market received positive news as total vehicle sales jumped more than expected. Once again the 50 day proved too much for the S&P 500 and Dow Jones Industrial average. Today’s volume was higher than Monday’s and not a positive for this market. We are still waiting for this market to confirm this recent rally, but the past two days have done very little to build confidence we will see a follow-through day. Tomorrow the market will close early and given the jobs report Friday it is unlikely we’ll see a follow-through day tomorrow. Tuesday’s market action mirrored closely to Monday’s action. Today we can at least blame Merkel and the demonstrations in Egypt for the sell-off, but they are simply excuses. Given the price advancement Monday morning the market would have had a short at following-through had Friday not been the day of the Russell index rebalances. Volume was there today, but price was lacking. Perhaps we’ll need to wait for Friday when we get the jobs report. Next week we’ll kick off earnings season. It will be interesting season seeing if Wall Street remains overly optimistic on earnings. Preannouncements have been on the negative side and not to mention we still have economic data to pour through. The financial media will have a field day speculating the actions of the fed. It is all noise. Focus on the process and stick with Big Wave Trading. Tomorrow’s day will likely be uneventful heading into the Fourth of July holiday. Please be safe and enjoy the day off!