Stocks Extend Gains Closing Higher for the 4th Straight Session

This week has favored the bulls as the market closed higher with gains for the fourth straight session. Volume ended mixed falling on the NYSE while running higher on the NASDAQ. A report on PC sales sent the likes of $MSFT, $INTC, and $HPQ lower putting pressure on the NASDAQ. Jobless claims were better than expected a far cry from last week’s big disappointment. Import prices fell more than expected showing inflation has yet to show up despite the Federal Reserve’s 80+ billion a month easing program. Our uptrend remains intact and it will take quite a bit to knock this market off its uptrend. Sentiment has made a big jump this week. II survey continues to favor more bulls with more than 50% of its respondents are bullish with just 20% in the bear camp. The big jump came from the AAII survey with almost 55% responded as bearish. A big jump week over week with last week’s Non-Farm Payrolls likely to be blamed for the overly bearish reading. AAII are individual investors and are more likely to flip flop on their views of the market much more than the II survey. I can’t remember ever a time where AAII bears were more than II bulls, but yet we have it here. We don’t care if this is good news or not for our uptrend, it is quite amusing to see the disparity between the two camps. Tomorrow we’ll get a read on Advance Retail sales and for some reason I get the feeling they’ll be better than expected. $XRT certainly says it will be better! However, $JPM and $WFC release earnings prior to the retail figures. Many banks have been lagging the overall market and we are about to get a heavy dose of earnings releases from the group. We have noted before the banks have provided the S&P 500 with the lion share of earnings growth last year and analysts are expecting the same for this year. Tomorrow we’ll get the first view of how bank earnings could be shaping up for the first quarter of 2013. We are in an uptrend and we’ll favor the long side of the market. Until we get heavy distribution and leaders falling we’ll get neutral. Until then, we are full steam ahead on the long side.

Bernanke Presses on with QE, but Volume Drops as Stocks Close Higher

Another Federal Reserve meeting and the central bank vows to continue to print billions of dollars a month until the Unemployment rate drops to acceptable rates. Cyprus fears seem to die down as it appears Russia will protect its own and give a bailout to the small island nation. Banks will not reopen to next Tuesday, but the situation begs the question will the next EU country who needs a bailout and is not involved with Russian Oligarchs will be required to confiscate bank deposits? Philosophical question, but we digress. Price action continues to indicate this uptrend will continue higher. Volume was lower on the day despite the Fed’s Chief promise to keep the printing presses pumping liquidity. How high and how far we’ll go is anyone’s guess, but we’ll continue to operate in an uptrend. Two blemishes on the day were HPQ and FDX. These two stocks have been leading this market higher, but both today turned lower. HPQ appears to have run out of steam after doubling since its November lows. FDX earnings release disappointed the market. Falling more than 7 points on the highest volume since 2010 it blew through its 50 day moving average. FDX had been leading the Transports to new heights, but after today it places a blemish on the current uptrend. Perhaps a bigger earnings story is what happened to ORCL in after-hours trading. When all was said in down in the after-hours session the stock fell more than 7% from today’s close. The stock missed its earnings expectations and was punished. ORCL has been pushing higher and leading the NASDAQ higher along with GOOG. We’ll see how the stock reacts in tomorrow’s session, but the drop in after-hours is quite telling. Now with the Federal Reserve out of the way it will be interesting to see if the market can continue to remain elevated. Time will tell and price will guide our trading.

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.