Monday, July 01, 2013
Stocks Close well of the Highs of the Session
The S&P 500 and Dow Jones Industrial average were both rejected at their respective 50 day moving averages despite better than expected ISM Manufacturing data. At 10 am the market received better than expected manufacturing data helping the market to jump to the highs of the session. Another test of the highs occurred just after noon time, but sellers took over. For the majority of the afternoon the major market indexes experienced selling closing well off their highs of the day. A late day rally helped stopped the bleeding. Small caps ended the day higher outperforming the S&P 500 by more than 80 basis points. Volume simply couldn’t compete and was below average. Not the type of action you want to see from a market trying to confirm a new rally. Day 5 of the attempted market rally was certainly an interesting day. In the early going it appeared we’d be able to confirm a new rally and be poised to run higher in front of second quarter earnings. The NASDAQ did fill the gap from 6/20, but was unable to close above it as sellers appeared to be waiting to unload on the market. Unlike the S&P 500 and Dow Jones Industrial Average the NASDAQ remains above its 50 day moving average. In addition, the Russell 2000 is above its 50 day and appears poised to break into new high territory. This certainly is a positive for both indexes and potential for a new rally to be confirmed. Anything can happen here, but it appears the Dow and S&P 500 are weighing the overall market down. All eyes will be pointing to Friday’s job figure. One big negative in today’s ISM report was the jobs picture. It wasn’t pleasant as the jobs index hit new lows. Hard to believe manufacturing is picking up that much without factories hiring. Could it be humans have simply been replaced to a point where manufacturing can pick up steam without having to hire? We’ll leave the guessing to the so called experts on CNBC and Bloomberg. As long as we ride our trends executing our strategy we’ll end on top no matter what the economy has in store for us. The morning started off great, but the ending was a lot less to be desired. We do live in the QE/ZIRP area where anything is possible. Stick with Big Wave Trading and we’ll lead you to success.