AAPL leads the NASDAQ Higher as Volume Expands; Crude Sinks

Heading into the first debate of the 2012 Presidential Campaign was led by the NASDAQ despite a faltering Semi-Conductor sector. Small cap stocks struggled as well with the Russell 2000 closing down 20 basis points. Volume expanded on the day, but with back to back days of subpar volume on Monday and Tuesday it was inevitable volume was going to increase. This morning’s ADP Employment change report showed 162,000 jobs were add in the month of September coming in slightly above expectations. In addition to the ADP report, a better than expected ISM Non-Manufacturing reading showed the service sector expanding in September. Not terrible news from the economy, but focusing on the price action we saw the market notch a day of accumulation. We still have not broken out from our recent trading range, but price action continues to be favorable to bulls in this uptrend. It appears the market is waiting on the debate tonight and Friday’s job report. Friday’s jobs report will more than likely disappoint not because of we don’t like the current administration, but the past few reports have been disappointing. In any instance other than the unemployment rate falling below 7% the Federal Reserve stock market put will more than likely dampen any bearishness related to the report. Anything is possible in QE trading. Look at crude falling more than four points today. Commodities are perceived as a good investment with the Federal Reserve printing presses running at full tilt. So while conventional thinking is a fun cocktail party discussion only price matters in the market. Whatever the market will bring we are going to be prepared. Tomorrow at 2 pm we’ll get the minutes from the latest FOMC meeting where Ben Bernanke announced QE3. It will be interesting to see how the market reacts to what the FOMC discussed during the meeting. Tomorrow should be a fun day with the market reacting to the first debate as well as the FOMC meeting minutes. Who knows we may even get a Spain bailout rumor. There is always something the chew on when it comes down to this market. Actions however, are governed by the price movement of our stocks. Enjoy the debates, but remember to cut your losses and there are other candidates then just Obama and Romney.

Late Day Rally lifts Stocks off the Lows of the Session

The markets experienced a low volume session ahead of tomorrow’s economic data. ADP Employment and ISM Non-Manufacturing index are set to hit the wires tomorrow morning. For much of the day’s session sellers had control over the market as AAPL touched its 50 day moving average. While the market as not heading for a day of distribution price action was not looking too kind. A close at the lows would have been on the bearish side of things, but the late surge by buyers helped take the bearish tint off the market. This uptrend continues to remain intact and our current consolidation continues. Aside from tomorrow’s economic reports is the first of a few presidential debates. At the moment, according to InTrade Obama will be the next President of the United States. We can debate polls, but money speaks and it is saying Obama wins in November. Tomorrow night’s debate may very well solidify Obama’s lead or swing the vote to Romney and it will be interesting to see how the market trades off the debate. For those who believe a Romney victory will lead to a rally do not count your chickens before they hatch. Anything is possible and opinions are often wrong. Capping the week off will be Friday’s job report. Given the weak PMI figures and uninspiring economic data it is hard to believe the economy has grown enough jobs to make a difference. On the surface we’ll get a peak at what the government calls unemployment. Real unemployment is much too scary of a number to report so we get an adjusted figure from our government. The Federal Reserve has now pegged Quantitative Easing infinity to the jobless rate and now this figure has become even more watched. Is it important, perhaps, but to for our purposes it always boils down to price and leading stocks. The Federal Reserve is here to stay and print, but it all comes back to whether or not we are in an uptrend or downtrend. After a quiet two days to start the week perhaps we’ll get a bit more action tomorrow. Keep those losses small.

Market Finds Relief, but Volume Fades

The NASDAQ managed to regain its 200 day moving average, but light trade confirms institutions aren’t willing to stick their necks out supporting this market. A positive ISM Non-manufacturing figure gave a bit of a boost to the markets. However, the European close provided sellers an excuse to tackle the market. In the end, the markets put in a nice day of gains. We are still a long ways away from getting a healthy market with the lack of volume on the upside. Until we see improvement we’ll continue to see lackluster trading. The fear trade lost traction today as the VIX lost its 200 day today. The index regained its 200 day Friday of last week when the NASDAQ and S&P 500 dove below their respective 200 day moving average. We did not see panic rush into the market during this decline. Panic begins with the VIX racing above the 30 level and so far investors have yet to panic. Sentiment is on the bearish side, but actions have yet to show any capitulation. Tomorrow we’ll get a few economic releases, but the big one will come out at 2pm eastern standard time. The Federal Reserve will release its Beige Book and the market will certainly get active around its release. Every market pundit is foaming at the mouth with the possibility of the Federal Reserve introducting another round of Quantatitve Easing. It is a sad state of affairs when the addict can only survive on the drug. For trend followers we simply do not care if QE will show up or not. Price will always be the first mover and we want to be onboard. Drop the opinions and follow price! Believe it or not today is Day 2 of another attempted rally for the stock market. It is nice we are above the 200 day for this rally attempt. At this point a rally confirmation is on the low end of the spectrum. We failed to see any panic/capitulation in the market and have yet to see any high volume reversal to the upside. However, a confirmation day here would certainly change our tune in the short-term. Until then, we’ll wait patiently and continue to operate under a sell signal. Cut those loses short.