Another Wild Intraday Session as the NASDAQ Closes Green for the 8th time in 9 Days

The market has become quite an interesting beast as of late with wild swings on every press conference DC makes. First Boehner’s comments sent the Dow down 50 points in a split second only to recover after Reid and Schumer respond. Nancy Pelosi was kind enough to wait for the market close to make her comments, but at the end of the day the market has moved higher again. According to Bloomberg volume was lower across the board and continues to be light overall. We are still operating without a true follow-through day, but despite the overbought conditions the short-term trend is higher. After the bell we got word the Democrats proposal would like to raise over 1.6 trillion in taxes and immediately raise spending by 50 billion. Republicans on the other hand are ready to concede the tax issue, but not the spending. For anyone to think a reasonable deal will be struck is crazy. Collecting less than 18% of GDP and spending 25% of GDP is not a sustainable model. You simply cannot overspend what you take in to eternity. It is not sustainable. We can argue over tax rates and where we should or should not cut spending, but if you can’t agree to pay only what you take in then no real solution will be had. We are now in extreme overbought territory and it would be good for the market to take a rest over the next few days. Even one day of a pull back on light volume would do this market some good. We only need to see a few days of this market taking a rest. Distribution would not be welcomed at all and we must avoid any serious price decline. If stocks are hitting buy points take the signal and have an exit plan. Hopefully tomorrow we can avoid seeing any more press conferences by any congressional member! Get out and enjoy the weekend.

The Market Shakes Off Comments from Bernanke and Close Flat

Continued positive data from the housing market helped boost the market in the early going. However, the focus would quickly turn to Ben Bernanke’s speech at 12:15. Prior to his speech this headline appeared: BN 12:15 *BERNANKE SAYS FISCAL CLIFF WOULD POSE `SUBSTANTIAL THREAT. And during his speech he stated the Federal Reserve would be unable to assist if Congress did not avert the fiscal cliff. The market did not like the sound of this and sold off as volume picked up the pace. It wasn’t before long before buyers stepped up and supported the market pushing the major averages back to flat line at the close. Volume slid on the day, but with the Thanksgiving Holiday upon us light trading is to be expected. It is hard to ignore the support we saw today and we’ll be looking for a confirmation day to switch to buy mode. The market will get initial claims tomorrow, but attention will be drawn to the European summit and black Friday sales figures by retailers. This year more roughly 45% of Americans say they would like to forgo Christmas all together this year. One would conclude with an improving economy should produce consumers willing to purchase more. Perhaps we are seeing the effects of declining real wages due to inflation caused by a Federal Reserve printing at warp speed. Will opening earlier help sales? Time will tell, but looking from the outside it does appear sales have the potential of coming in on the low side of things. Then again, the market may ignore this and move higher. Price rules above all else. A couple of big technology stocks got hit hard today. HPQ and INTC both sunk to new lows as both stocks appear to be heading into the single digits. HPQ simply cannot turn itself around in a consumer dominated commodity business. INTC announced its CEO is departing in May and the news did not sit well with the market. We know CAPEX is falling and these stocks are certainly feeling the effects of decrease spending. We await a confirmation day for this rally attempt. It may be difficult to see one with Thanksgiving on Thursday, but we have seen stranger things.