AAPL weighs on the NASDAQ as the S&P 500 Closes in the Green for the 6th day in a Row

AAPL was the talk of the street as the stock took a plunge on fourth quarter earnings. Initial jobless claims came in better than expected helping out on the job front (we’ll forget the surging number of people receiving food stamps and long-term disability). The market appeared poised to continue much higher with the market shaking off AAPL’s move. Just before noon time the NASDAQ had almost erased all of the day’s losses but sellers took over. Sellers dominated into the 2:00 pm EST hour when so when the VIX began to fall back helping the market come off the lows. NYSE and NASDAQ volume were higher giving the NASDAQ a day of distribution and a stall day for the S&P 500. We still have our uptrend and a rest here would make sense. However if this were to turn more sinister we have our exit plan. Gold and silver took a big hit today while other commodities were able to hold up. Gold and silver have yet to push higher despite the Federal’s Reserve’s desire to print $85 billion a month without an expiration date. Perhaps the medals know something about next week’s Fed meeting that the other market don’t. For now, both remain in their short-term uptrends despite their action today. Sentiment is at extremes with many surveys at multi-year highs. The AAII survey showed bulls at 53% highest since last February. Hulbert’s Financial Digest reading is at a level not seen since 2000. While this may be an indication upside may be limited we simply cannot trade off of it. The market may very well turn over here and head lower, but it is anyone’s guess and why we have sell rules in place. Stick to your game plan and execute. Short-term ETF Trends: TICKER ST TREND TREND CHANGE DATE CLOSE % SPY UPTREND NO CHANGE 1/24/2013 149.41 0.03% IWM UPTREND NO CHANGE 1/24/2013 66.66 -1.38% USO UPTREND NO CHANGE 1/24/2013 34.76 0.43% UNG UPTREND NO CHANGE 1/24/2013 19.53 -2.35% GLD UPTREND NO CHANGE 1/24/2013 161.42 -1.10% SLV UPTREND NO CHANGE 1/24/2013 30.65 -1.73% DBC UPTREND NO CHANGE 1/24/2013 28.07 -0.07% FXY DOWNTREND NO CHANGE 1/24/2013 108.66 -1.69% FXE UPTREND NO CHANGE 1/24/2013 132.7 0.41% TLT UPTREND CHANGE 1/24/2013 120.09 -0.35% TLT signals a change in trend from downtrend to uptrend. Have a great weekend.

Stocks Advance on Higher Turnover

A positive housing start figure gave a big boost to the futures this morning including homebuilders after housing starts jumped 12% month-over-month. Initial jobless claims fell more than expected and despite a very negative reading out of the Philadelphia Federal Reserve manufacturing index the market was able to push higher. Volume on the indexes rose above average across the board, but overall volume still remains anemic. By 2:30 the market was at its highs for the session only to be disrupted by selling at the end of the session. While the end-of-day action was not ideal it was still a very good session for the market. The move in the market today has, in our minds wiped out all the distribution days we have seen in the past four weeks. Any distribution here we’ll begin to count and watch carefully. The lows of this week must hold as well if this market wants to continue hitting 52 week highs. You’ll hear plenty of pundits tell you where they are predicting the market should head, but they’ll be wrong. Predictions are for those who need to feel smart and need to feel they know more than you. If predictions were often right you’d have a heck of a lot more “wealthy” traders sitting around. Know what you are trading, where your entries are, how much to trade, and where you exit and forget the noise generated by Wall Street. Tomorrow we’ll get options expiry and a boat load of volume. Options expiry is a day where volume can be completely ignored. It will also be interesting to see how price reacts to the volume when we have raced higher after the Fiscal Cliff “can kick” solution. We can only trade off the current price information we have and not what we “think” may happen. Anything can happen and will happen and we accept this in our trading methodology. Get out and have a great weekend!

GDP Prints above 3% as Stocks Trade in Tight Daily Range

In a surprise event 3rd quarter GDP printed above 3% above expectations. Unfortunately, the surprise to the upside failed to induce a strong response from the stock market. Initial jobless claims rose to 361,000 for the week a bit higher than expected. But, dominating the headlines was John Boehner’s plan B for the Fiscal Cliff. Volume ran lower throughout the day suggesting institutions were taking a break. Leading stocks help up relatively well while ISRG and HLF continued their declines. Financials and in particular BAC continued to march higher with Small Caps continuing their run. At the close, stocks closed near the highs of the day finishing much better than Wednesday session. Our uptrend remains intact and we’ll see how stocks react to tomorrow’s quadruple witching. News hit John Boehner pulled the vote on his Plan B sent futures MUCH lower. The Emini-S&P 500 futures dropped more than 2% in 2 seconds. The only way this occurs is with computers fighting one another. The low print was 1391 nearly a 50 point decline in the S&P 500. We aren’t about to react to the moves in after-hours session and we’ll see how we open/finish tomorrow. If we move lower and hit our exits we’ll gladly do so. For now, we’ll remain with our positions and react as our rules say we should react. There are positives in this market with small cap stocks leading the market higher. Barring a disaster tomorrow this uptrend should continue to move higher. We do have plenty of bulls in the market with the AAII Survey showing more than 46% of its respondents say they are bullish. Only 24% responded as being bearish over the next 6 months. While the percentage of bulls is not at highs it is nearing frothy levels. Remember, sentiment is far from a perfect indicator for the market. However, for the fourth straight week we have the number of bulls above 40%. Tomorrow will be fun with options in four different markets expire. Volume should soar tomorrow skewing our volume data. Price action will be pivotal given the reaction to the cancelling of the Plan B vote. There is no need to have guess work here. Stick to your plan and execute with precision. Have a great weekend and despite what many are predicting for 12/21/2012 we’ll see you next week.