Tuesday, July 09, 2013

Stocks Rise as Volume ends Mixed

Sloppy action began the day as sellers immediately hit the open. However, just after 10:30 and during the Fed’s open market operations did the market find its footing and reverse course. For the fourth straight day the market saw gains, but volume ended mixed on the day. NASDAQ volume was higher on the day, but slid on the NYSE. Traders weren’t too active on the NYSE today. Perhaps tomorrow’s release of the FOMC meeting minutes is weighing on trader’s minds. Whatever it is, trading was not active today on the NYSE giving pause to this most recent rally attempt. Price action remains okay for the markets, but without a confirmation day it is looking like if this rally is to continue gains will be limited. Homebuilding stocks turned things around today. The group has been beat up for quite some time. Higher interest rates will certainly negatively impact buyers’ purchasing power. Price action in the names still needs some work to show any turnaround is possible. For now, we’ll keep an eye on the group for improvement. Any weakness will certainly be a sign of things to come for the group. HYG and JNK continue to act like junk despite HYG’s attempt today. It is anyone’s guess where rates will go next, but for now it appears higher rates are here to stay. HYG and JNK certainly have been hindered by higher rates. Even XLU has come well off its high set back in April. Anything related to yield has been taken to the woodshed. Until we get a signal otherwise, it appears these sectors will continue to be under pressure and see lower prices. It was interesting to see the XLF breakout today approaching May highs. Financials are an important indicator on where the market is heading. First we had Small Cap stocks breakout into new high territory and now with financials nearing a new high this is certainly a positive for the overall market. There are positive signs for this market and there are negative. Confused? Biased? Join Big Wave Trading and focus on winning.

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