Technology led by FB fuel the NASDAQ Higher

The NASDAQ hit a new multi-year high prior to noon time only to see sellers rush in and quickly move the index to its lows of the session. The S&P 500 was unable to sustain its morning gains too despite the efforts by technology names. Industrials and utilities helped push the SPX into positive territory. Consumer Services was the largest drag. Volume was up on the session across the board, but like most summer trading sessions volume ran below average. It is not big surprise volume is below average with the Fed on tap to deliver its policy statement tomorrow at 2pm. This uptrend remains intact given the price action we have in front of us. So many are concerned over the actions of the Fed tomorrow and are trying to gamble with how the market may or may not react. You cannot be 100% sure how the market will or won’t react to whether or not the Fed talks taper or not. It is pretty clear at some point they will taper and finally end the QE program. When is another question to be answered only by the Fed. Many do believe it will start sometime this year and with the falling budget deficit it will be interesting to see if the Fed will become the soul purchaser (monetizer) of US Treasury debt. Or will they simply taper their purchases. All fun questions to ask, but it is no way to position yourself to make gains in the market. FB gave a classic entry after posting earnings last week. The stock hasn’t looked back since it took a breather on Friday. There have been plenty of naysayers, but price action clearly shows there is a bias to the upside. AAPL was leading the charge along with FB, but pulled back from its high of the session. There is clear resistance at the February, March, and May highs. It will be interesting to see how the stock reacts at these points. A rising AAPL price is certainly a gigantic positive for the NASDAQ. Aside from the Federal Open Market Committee policy statement release second quarter GDP is set to be released. According to Bloomberg the consensus figure is for 1% annualized growth in the second quarter. Quite pathetic as the Fed has been pumping $85 billion a month since December and one percent growth seems quite pathetic. Common consensus says a higher than expected GDP figure would push the Fed to taper sooner rather than later. How the market reacts will be how we react. We will not try to game the direction of the market. Stay with the trend.

Obama’s Economic Speech Fails to Inspire Buyers; AAPL Jumps

A big jump in New Home sales failed to get the market going as the homebuilders sold off hard on the news. The talk of the street was AAPL earnings and the stock’s big move on the day. Without AAPL the NASDAQ would have notched a day of distribution. The S&P 500 could not escape distribution settling down .4%. Even though the NASDAQ did not suffer the same fate as the S&P 500 it did give up almost all of the gains had at the open. Not typically something you want to see in an uptrend, but it isn’t a gigantic red flag. In after-hours trading we had quite a few earnings moves setting up nicely in the morning. We are still without enough distribution days and negative price action to call the end of this uptrend. While we may be long in the tooth we don’t have the proper signals telling us this is over. AAPL was an earnings winner as many were calling for an atrocious quarter from the technology giant. More earnings in the after-hours session will help set the tone tomorrow at the open. Earnings gaps have been a great way to play earnings season. Stocks must meet certain criteria before they can be considered, but they can be quite profitable. Homebuilders sold off in heavy volume and it comes to no surprise even with a big jump in new home sales. ITB and XHB are certainly struggling and while the housing data points to a positive outlook perhaps fundamentals truly are best at tops. In addition to ITB and XHB another key sector looks to be rolling back over and that is XLU. After rallying along with bonds (yields falling) yields raced higher today putting pressure on Utilities. Utilities are far from sexy, but along with Housing this sector is seeing quite a few headwinds. You’ll find plenty top callers in this market. It has proven to be a fool’s game trying to game a market top. Don’t call tops and ride your winners.

End of Day Selling Push the NASDAQ and S&P 500 to the Lows of the Session

Earnings season continues and the prevailing theme is for companies to beat on the bottom line, but fall short on top line growth. There are many things we can extrapolate, but in the end it won’t help our bottom line. A big miss from the Richmond Manufacturing index highlights weakness in the Northeast manufacturing sector and the market reactive negatively to the news. Spending majority of the day near the lows of the session the NASDAQ pushed into new low territory just before the closing bell. Not the type of action you want to see from a price action stand point. The NASDAQ did post a day of distribution and has been piling on a few days here. It is something to keep an eye on despite this market remaining in an uptrend. Much will be made of AAPL’s earnings release. At this time they have yet to release earnings and I’ll make a note of them when they do report. The stock has been a drag on the entire market especially the NASDAQ yet it hasn’t kept the NASDAQ from gaining nearing 19% YTD. I suspect a sharp rise in the stock will have many shorts running for the hills. Initial reaction to earnings: It appears AAPL beat estimates and its guidance is sort of inline. The reaction is positive at the moment, but the stock will need to clear some levels before any long signals are generated. Any positive news for AAPL will benefit the NASDAQ greatly and push the index higher. Stay tuned. The insane stock moves after earnings releases, makes it very difficult to hold into the report. If you do not have a sound process you will certainly lose your nerve during earnings season. If you hold an abnormally large position and are stuck it is likely your position size is too large. More often than not many traders simply do not understand risk management and adopt the “go big or go home” mentality. Unfortunately, this is not the type of approach you want in this market. The idea is to stay in the game for a very long time not just a few minutes. Make risk management a priority.

Distribution hits the Market despite Banks moving higher

Void of economic data early morning futures were lower on the back of European stocks and Nikkei futures moving lower. Volume started the day mixed, but gained momentum throughout the session. Even though today’s session was a technically a distribution day we were able to close in the upper half of the trading session. The final 30 minutes of the trading session was not particularly strong as buyers were simply absent. The market is still above last week’s low and our uptrend still intact. Until evidence piles up we’ll continue to operate on the long side. An interesting development is what is going on in the Lumber futures market. Lumber continues to open limit down and is roughly 30% off its highs. Homebuilders ended the day lower, but remain near their highs. XHB has seen very little accumulation since April even though it has hit new highs. Distribution is clear in the chart and it is a prudent move to obey price signals in the homebuilders. Financials were winners on the day led by the big banks. You name them they were higher today. This is a good sign for the market when the financials are able to hold up in spite of the broader market sell-off. Even AAPL was positive on the day not contributing to the NASDAQ fall today. Keep an eye on financials as this market pushes forward. There are plenty of pundits in blogosphere as well as CNBC convinced we have seen the top in this market. Last Wednesday could have very well been the top, but how can we be so sure? We don’t have distribution piled high and our market leaders falling apart. Yes, TLT and bond yields are jumping, but this isn’t an all-out sell signal. TLT and HYG have been hit hard and something we’ll keep an eye on, but our focus is our stocks and the market. When are sell signals are given we’ll take them. At this point we haven’t been getting any and will respect our process. Remember to cut those losses.

NASDAQ and S&P 500 Extend Friday’s Gains

There wasn’t much fanfare in today’s market without any US economic data. In fact, this week will be quite a bore for those who thrive on economic data. AAPL gained more than two percent as the stock has moved off multi-year lows. BAC vaulted 5% on very strong volume has the stock has moved higher from its most recent consolidation. Volume will be ignored until we see a parabolic run in this Federal Reserve highly accommodative environment. The trend is up and it is very difficult to fight this trend. It is nice to see gains were followed through on this time around. Perhaps we are seeing the beginning of a parabolic run or the top for the moment. In the end, we cannot predict the future nor can anyone else. At the moment we have a trend that simply will not quit and we aren’t going to fight this trend tooth and nail for a top. Opinions are often wrong and are very costly and it is best to focus in on price than another input. Stick with the trend. Another “nice” thing we saw today was individual leading stocks breaking out. A few names have potential ending up as new longs for tomorrow morning. Big Wave Trading members will be getting a treat for tomorrow. If you aren’t a member what are you waiting for? Go here to sign up http://bigwavetrading.com/register/. It is vital we have a breadth of stocks breaking out for this market to be able to sustain this uptrend. Get on this Big Wave! Last Friday’s job report was viewed a positive with upward revisions and the headline number not as bad as everyone had predicted it to be. The labor force held steady at 1979 levels while unemployment dropped to 7.5%. Average Hours worked may provide a glimpse into how Obamacare (aka the Affordable Care Act) has pushed many companies to hire more workers but cutting their staff’s hours. How this all works out is anyone’s guess, but having more workers working fewer hours doesn’t feel like a recipe for success. A good start for those who are long the market and tomorrow we’ll see if the Dow can close positive for the 18th straight Tuesday. Cut those losses and ride your winners.

Stocks Extend Gains for Third Straight Day

Early morning rally from European markets albeit on continued economic weakness helped fuel early morning gains in US Futures. China didn’t help matters with a disappointing Flash PMI reading with the Shanghai falling 2.6%. US economic data didn’t surprise to the upside with the Markit US PMI came in at 52.0 with the expectations at 53.9. The Richmond Fed Index fell to -6 reading showing continued weakness in US Economic data. New Home sales did gain more than expected fueling a big rally in equities. Even with a mini-flash crash mid-date due to the AP being hacked the market was able to claw higher with volume expanding. The market continues its choppy ways as more economic data is set to be released tomorrow. How could we not mention AAPL till the second paragraph? AAPL released earnings at 4:30 pm EST beating estimates for the quarter. Guidance was weak at best with margin compression taking hold. The company raised its dividend by 15% and doubled its stock buyback program by $50 billion! Initially, the stock jumped on the news. However, by the close of the after-hours session the stock fell back below the close of the normal market hours. Weakness is not a trait we want to see in our stocks and with the weakness in AAPL we’ll leave the stock be for now. Outside of AAPL’s earnings the entire after-hours session was filled with earnings disappointments. EW, CREE, PNRA, and AMGN are just a few stocks having a tough time with earnings. AMGN has been a big winner for the NASDAQ producing decent sized gains for the index. VMW was another earnings loser with the stock tumbling 6% in the after-hours session. Holding through earnings is a dangerous game and if you do not have enough cushion or you are holding in size it is prudent to reduce your position. ARMH was certainly an earnings winner, but this time of action post earnings has been somewhat scarce. Stick with your rules and earnings season will go smoothly. Tomorrow we’ll get a read on Durable goods with Autos expecting to bring down the figure. Given all the negative economic readings it would be fitting this number will disappoint too. We’ll follow price and ignore the noise. Stick to your rules and cut your losses!

Volume Jumps and Stocks Fall Ending the Market’s Uptrend

The NASDAQ Composite loses its 50 day moving average on heavy volume. AAPL and GOOG lead the NASDAQ 100 lower as the big cap technology closed down 1.99%. Commodities followed stocks lower with copper and other metals leading the charge lower. The Federal Reserve’s Beige book showed moderate growth due to autos and housing but did very little to lift the market further off its lows. Blue chips continued their outperformance with help from JNJ and HD. The action as of late is certainly along with volume has thrown our uptrend out the window. We will act accordingly to our rules. Economic news has not been good across the globe and up until this week the market has ignored them. This morning BAC released disappointing results and CSX CEO stated this economy would only grow 1-2%. Two percent growth is simply not good enough and anything less than 2% would cause big impacts. Many estimates from the public to private sector are counting on growth to solve our problems. If growth doesn’t show up it will cause significant impacts to bottom lines. Earnings will continue to pour in and while there was quite a bit of optimism heading into this earnings season it is how the market reacts is what is important to us. We do not pretend to even think we could predict the future like many pundits on CNBC and Bloomberg. Our focus is on our trend following process to set ourselves apart and obtain superior performance. Focus on price action and using our rules to know when to get in and out is how we drive superior results. Tomorrow we’ll get our weekly look at Jobless claims. It is anyone’s guess how the number will turn out, but it is sure to get a good rant out of Rick Santelli! Who doesn’t love a good rant every once in a while. Perhaps we have our correction that every bear has been calling for at our doorstep. We simply won’t know until it is over. Stick with Big Wave Trading and we’ll get you to a higher level of trading. Cut those losses and ride your winners.

Cypress Bailout Dominates Headlines as the Market Cools

This uptrend is hanging by a thread, but continues to find just enough support to halt any correction. It is very easy to blame the Dutch Finance Minister even after clarifying his statement. However, even after clarifying his statement the market still couldn’t find its way back to positive territory. LNKD wiped out Friday’s gains while V broke through a buy point. SPLK, V, AMBA, and LL broke out of bases on strong volume. The fear is will they end up like LNKD wiping out Monday’s gains? Questions only tomorrow will bring and we’ll continue to plug along in this uptrend until we get a signal of a possible change. There was quite a bit of noise over the Cyprus bailout and it being the new template for future bailouts. From a trading perspective we do not care one way or another. Our rules will guide us with the help of prices. However, it begs the question why would you ever have a deposit account balance above the insured amount? It’ll be interesting when they do open the banks what depositors with balances greater than 100,000 Euros will do. It is a side show now and we’ll draw great comic relief from it. Our two leading stock indexes continue to show weak relative strength to the general market. For the past two years both of these indexes have shown weak relative strength. The search for yield has not come from the growth side of the house, but the value side. Dividend paying stocks yielding higher than the 10 year treasury yield have been very popular. However, focusing in the top performing stocks like FLT and cutting laggards like AAPL will reap you great rewards. Tomorrow we’ll get a reading on durable goods orders. Alongside durable goods more Cyprus bailout talk will likely continue. Focus on price and ignore the opinions. We remain in an uptrend and there are stocks breaking out like AMBA, LL, V, and SPLK. Distribution count stands at 4 days on the NASDAQ and S&P 500. Any further distribution will likely tip the scales in favor of a correction. Time and price will tell. Cut those losses.

The Dow keeps the Streak alive at 8 Days

Another late afternoon lift helps send the Dow into positive territory to end the day’s trading session. Just after 2 pm stocks sat near the lows of the session, but buyers stepped up keeping the market from pushing lower. Volume ended higher on the day, but the early high run rate fell as the market moved higher. At this point volume hasn’t mattered to this market whatsoever. However, it does provide a nice talking point. Not too many standouts on the day, but AAPL resumed its march lower as the stock continues to remain in no man’s land. The S&P 500 and NASDAQ did notch technical distribution days. Despite the distribution the support at the lows we aren’t going to be a lot of weight on the day. We remain in our uptrend and until we see distribution pile up we’ll change our approach. Two leading stocks who had tough days were SLCA and EVER. Both stocks had been moving quite nicely but a secondary offering and downgrade both stocks find themselves under pressure. SLCA issued a secondary offering, but the stock found support. Like SLCA EVER was downgraded and it too found support by the close. This type of action will shake a lot of people out of positions especially without a game plan. If you have defined positions size, entries, and exits you will not be so easily shaken out of positions. Tomorrow’s advance retail sales will be the talk of the financial media tomorrow morning. The question they will try to answer is whether or not the Payroll Tax hike had any effect on consumer spending. I would expect it would not greatly move it one way or another just yet. We can sit here and waste time trying to figure out if the consumer was hurt or not. We are in an uptrend and price is much more important to us rather than guessing. Stay disciplined and always cut those losses short.

Industrials hit more Highs but Volume Drops again

For the 7th straight day the Dow Jones Industrial Average closed higher. Volume fell across the board, but this is normal for this uptrend and Mondays. VIX fell to new lows as buyers continue to show extreme complacency. AAPL reversed off its lows in the afternoon pushing the NASDAQ to new highs on rumors of a “plan” for their cash. The stock is so beaten up any rumor will force shorts to flee for the hills. The Yen and Pound continued their declines as both currencies appear to be racing towards zero. Although it appears the Yen will likely win this race. We aren’t surprised by new highs and we’ll continue to operate on the long side of the market. There weren’t too many negative signs in the market other than the extreme light volume. NYSE volume was extremely low and you have to wonder where the institutions are. Where did they go? KORS a leading stock dropped below its 50 day in high turnover. The stock has continued to struggle after reporting earnings. SLCA issued a secondary after the bell and this leading stock will need to prove it can absorb the excess supply. The Fed’s money printing has seemingly put a floor in the stock market and any downside will be limited. However, we know better and we will continue to work our process. Wednesday is a big day for the markets as we get a reading on February advance retail sales. Many have made a big deal over the pay roll tax increases. WMT stock price has ignored the internal memos regarding sales. TGT has broken into new highs despite consumers having to deal with higher taxes. It will be most interesting to see how the market reacts to the release. Friday’s job report was finally a good sign, but we’ll need to continue to see jobs created a large pace. Unfortunately with the Federal Reserve printing $85 billion a month and continuing ZIRP. At some point either the Fed or the market will stop QE and ZIRP. We need a healthy economy without endless money printing.

Dow and S&P 500 End Higher for the Fourth Consecutive Day

A positive reading from the ADP employment survey helped fuel stocks early pushing the Dow further into all-time high territory. BAC helped push the Dow as the stock aims to hit new highs on strong volume. By mid-day the markets were off their highs awaiting the Federal Reserve’s Beige book. The Federal Reserve noted growth in the economy due to gains in housing. Initially pushing stocks off their lows it appeared the Beige Book would send the stocks into new highs on the day. The rally would stall out just after 3pm. A late day small push off the lows by the bulls kept the major indexes from closing on their lows. It was good to see the market avoid distribution just after hitting new highs. GOOG and AAPL were drags on the NASDAQ today. AAPL continues to act poorly while GOOG pulls back after two big sessions. Both companies are fighting over the smart phone universe and both stocks are heading in different directions. A key point in both stocks is their relative strength. Focus on stocks with high relative strength and in the case of GOOG and AAPL is demonstrates the importance of relative strength. A few IPOs continue to act well. Our Platinum members were alerted to EOPN Monday morning to its potential. When IPOs act well you can bet the market is healthy. We’d love to see stocks like EOPN and EVER continue their moves higher. There is a lot of chatter about how far this market rally can go. Does it really matter where it ends when you focus on your exits? Sure, we’d love for this uptrend to never end and we go up every day. However, we know this is simply will not occur. No one knows how far or how long this will last. Therefore, we must have exits we know maximize our potential to take the maximum gain possible from the market. Otherwise, we’ll be leaving gains on the table and we strong dislike leaving gains on the table. Stick to your game plan. Let your winners fly and cut those losses.

GOOG and AMZN lead the Market higher Despite Light Volume

Stocks moved higher despite the Shanghai dropping 3.65% as the country tries to solve its real estate issues. Intraday volatility continued, but stocks were able to find their footing after the lunch hour. Lows were set just after noon time and did not look back. Volume throughout the day ran well under Friday’s levels. We aren’t surprised volume was running lower as we have seen Mondays have been low volume days. GOOG and AMZN lead the NASDAQ along with YHOO while AAPL continued to lag. Today’s price action is bullish, but we still remain in Neutral mode and looking for a follow-through day. AAPL continues to remain weak and we are not surprised one bit as the stock has been in a downtrend for quite some time. We can point to many different reasons for the stock’s decline. Does it matter what reason we pick? Not one bit. At this point you will have many trying to pick a bottom in the stock and will fail miserably. The stock does have a pivotal point of 435 and a move above that would be a buy signal. We can’t predict moves and can only react to how the stock moves. GOOG broke out to new highs on big volume today showing the big cap technology stock continues to see accumulation. Perhaps GOOG Glass will be a big product break through adding to GOOG’s bottom line or not. The action in this stock while not ideal is quite bullish. At this point, you are chasing the stock if you are thinking of buying it here. If we get more stocks acting like this we’ll see this market push to new highs. Tomorrow’s economic release will be from the ISM Non-Manufacturing. Later in the week we’ll get the Fed’s beige book. While these will provide an excuse for the market to move and we’ll be ready to react. Short-term Trends TICKER ST TREND TREND CHANGE DATE CLOSE % SPY DOWNTREND NO CHANGE 3/4/2013 152.92 0.53% IWM DOWNTREND NO CHANGE 3/4/2013 91.13 0.26% QQQ DOWNTREND NO CHANGE 3/4/2013 67.68 0.45% USO DOWNTREND NO CHANGE 3/4/2013 32.40 -1.04% UNG UPTREND NO CHANGE 3/4/2013 19.45 1.99% GLD DOWNTREND NO CHANGE 3/4/2013 152.30 -0.09% SLV DOWNTREND NO CHANGE 3/4/2013 27.60 -0.07% DBC DOWNTREND NO CHANGE 3/4/2013 26.84 -0.37% FXY UPTREND NO CHANGE 3/4/2013 104.86 0.10% FXE DOWNTREND NO CHANGE 3/4/2013 129.13 -0.03% TLT UPTREND NO CHANGE 3/4/2013 118.9 -0.53%

Volume Jumps after the Fed releases its Meeting Minutes

Building permits and housing starts failed to inspire the market, but the selling didn’t start ramping until the FOMC meeting minutes. Volume for much of the day was running lower than Tuesday’s level as traders were waiting on the Federal Reserve’s latest meeting minutes. Upon the release it was clear from the release the Central Bank is at least talking about ending the or at least curbing the latest round of asset buying. The minutes also revealed the Fed is a bit more optimistic about the state of the economy and therefore could reduce the size of their purchases. Sellers didn’t need much more than that to take stocks below last week’s low in heavy trade. One day doesn’t make a trend, but today we finally saw some heavy volume selling. Our uptrend is on shaky ground and it is a prudent move to make sure you have your exit strategy in place. AAPL continues to weigh on the overall market, but today sellers took to the entire market. GOOG dropped back below $800. Crude oil fell more than two points with Gold and Silver falling hard on the day. One day doesn’t make a trend, but it is these types of days where you stand up and take notice. When indexes and leading stocks get hit hard you have to take notice and adjust. Know where your exits are and make sure you stick to your plan. It will be important for this market to find its footing to keep the uptrend alive. Selling in bunches like today are a big red flag for the market. Your stocks will let you know what is going on and if you are noticing your stocks are quickly hitting your exits it is a good sign the broader market is about to head lower. We are in caution mode and will need to see this market shake off today’s selling. Know your exits! Short-term Trends: No changes for today, but any further selling we are likely to see SPY, IWM, and QQQ flip to downtrends. TICKER ST TREND TREND CHANGE DATE CLOSE % SPY UPTREND NO CHANGE 2/20/2013 151.34 -1.25% IWM UPTREND NO CHANGE 2/20/2013 90.83 -1.86% QQQ UPTREND NO CHANGE 2/20/2013 67.19 -1.54% USO DOWNTREND NO CHANGE 2/20/2013 34.17 -2.26% UNG DOWNTREND NO CHANGE 2/20/2013 18.32 0.11% GLD DOWNTREND NO CHANGE 2/20/2013 151.44 -2.50% SLV DOWNTREND NO CHANGE 2/20/2013 27.59 -2.99% DBC UPTREND NO CHANGE 2/20/2013 27.92 -1.13% FXY DOWNTREND NO CHANGE 2/20/2013 104.82 0.05% FXE DOWNTREND NO CHANGE 2/20/2013 131.68 -0.85% TLT DOWNTREND NO CHANGE 2/20/2013 115.92 0.30%

The Market Hits Stall Speed as the market Digests the State of the Union

Stocks enjoyed buying through the early morning session as Europe rebounded from its recent pullback. By 10:30 the market changed behavior as it simply could not maintain its high of the day. Thirty minutes prior to the European close the market took a nose dive and hit the lows of the session. Volume was running higher throughout the session and indicating the market had begun hitting stall speed. A late day push from CSCO and AAPL assisted the market lifting from the lows of the session, but the Dow Jones Industrial Average did not escape a day of distribution. Tough to call a stall day on the NASDAQ, but for back to back days the index has been unable to hold the highs of the day. The market is having a tough time with the highs up here. We remain in an uptrend and while there are subtle signs of cracks we haven’t had an all out sell signal. CSCO reported earnings after the bell and they beat their numbers. However, the initial pop the stock enjoyed was short lived with the stock pulling back. The stock has been on a heck of a run since November contributing to the success of the NASDAQ. Given the action now it appears all is well with the stock, but tomorrow is a new day and anything is possible. If you are long the stock, just know where your exit is. It appears the past few sessions earnings have not been kind to the majority of stocks. PRLB is an exception after earnings. The stock blasted higher with volume to boot. A very good sign for those who are long the stock. PCYC was another earnings winner. CMCSA started the day off right, but like the market was unable to sustain the high. The loss of the day came from a growth stock RAX. RAX clearly disappointed the street as the stock fell hard in massive trade. This is not what you want to see out of a growth name. BWLD was another loser on the day. Earnings season has created quite the volatility in stock movements. INVN and KORS continued their slumps. There are positive and negatives to the current market rally. Everyone and their mother are expecting a pullback. When and how this market correction unfolds is anyone’s guess. It is tough to really say we have hit a market top without major distribution following these stall days. Know your exits and wait for your price signals to hit.

NASDAQ Stalls as Volume Finishes Higher

NASDAQ Composite continues to lag behind the Dow Jones Industrial Average and the S&P 500. Volume rose across the board, but remained below average. The NASDAQ notched a stall day and although it failed to register a day of distribution. Stalling days are nothing new and all it will take is for the NASDAQ to eclipse today’s high. Two star industries on the day were XLF and XHB as both groups appear to be ready to run higher again potentially in a blow off move. End of day action took the market off its highs, but the S&P 500 and Dow were able to escape too much damage. AAPL weighed on the NASDAQ once again as the stock continues to prove it is a laggard. One question would be is the stock the canary in the coal mine? There is no question AAPL’s products are great, but is the action in the stock foreshadowing something in the overall market? Or is it simply a laggard stock and should be completely ignored? Time will tell where this stock will end up. However, we know the stock is in a downtrend and is all we need to know. Wednesday we’ll see the market react to the State of the Union. President Obama’s speech is pretty much known as he will revert to ideas he trumped on the campaign trail. More taxes and more spending (disguised as “investments”) will be proposed. The President has a way of delivering a great speech and this should not be any different. Democrats will praise the president while Republicans will detest it. After the speech all eyes in the political world will pay attention to the Sequester on March 1st. A few disappoints in earnings this morning with KORS and INVN reversing gains. While KORS was a viable gap its inability to hold onto its opening price certainly puts a blemish on the stock. INVN was just terrible. In the after-hours session we had a few leading stocks have a tough time. RAX for one has been a stalwart for this market. Unfortunately, the stock fell 10% in the after-hours session. PCYC a thin name jumped 2% after reporting earnings. A stock to watch for a potential gap move at tomorrow’s open. NTGR and BWLD were on the negative side as well with both stocks falling hard. Not a pretty picture for the majority of earnings with only a few bright spots this afternoon. Regardless of your opinion of the market we remain in an uptrend. This may or may not change tomorrow, but if it does we are prepared.

Stocks Pullback in light Volume as the Market trades in a Tight Range

Today was largely an uneventful day as volume was well below average and well under Friday’s level. Sellers continue to be on vacation as buyers were able to lift the market into the close. AAPL was the talk of CNBC, but the stock remains in no man’s land despite the potential for the company to return cash to its shareholders. The Yen continued its decline as the Bank of Japan is hell bent on destroying its currency. In commodity land crude oil jumped back to 97 and appears the commodity is headed above par. It remains to be seen if these high crude prices will hurt the economy. We remain in our uptrend and at this point we don’t see enough evidence it will end any time soon. Tomorrow we’ll get the President’s view of the state of the union where we’ll l likely hear about new spending measures. FSLR and SCTY moved and while we have high crude oil prices the President will likely renew his call to invest in solar. We simply see two stocks moving and at the moment it appears the industry is improving. Free government money is nice and when you couple it with higher crude prices solar certainly looks like a hot industry. Europe continues to have issues and the DAX closed below its 50 day moving average again. The EURO has gained quite a bit because at the surface the ECB is not set out to destroy it. Our short-term trend model has been long FXE for quite some time. How long will it last? It is anyone’s guess, but for now the currency is in an uptrend. The Yen continues its decline and the dollar remains stuck in the middle. Currency markets have a funny way of making headlines and for now FXY and FXY remain in solid trends. Bulls are looking for a correction to buy and bears are looking for a correction to sell. Sentiment continues to be bullish, but either camp has yet to win. Remember to have a game plan in place! TICKER ST TREND CHANGE DATE CLOSE % SPY UPTREND NO CHANGE 2/11/2013 151.77 -0.02% IWM UPTREND NO CHANGE 2/11/2013 90.70 -0.11% QQQ UPTREND NO CHANGE 2/11/2013 68.01 0.03% USO UPTREND NO CHANGE 2/11/2013 35.12 1.21% UNG DOWNTREND NO CHANGE 2/11/2013 18.45 0.49% GLD DOWNTREND NO CHANGE 2/11/2013 159.70 -1.16% SLV UPTREND NO CHANGE 2/11/2013 30.00 -1.41% DBC UPTREND NO CHANGE 2/11/2013 28.45 -0.35% FXY DOWNTREND NO CHANGE 2/11/2013 104.42 -1.20% FXE UPTREND NO CHANGE 2/11/2013 132.94 0.26% TLT DOWNTREND NO CHANGE 2/11/2013 117.12 -0.08%

AAPL Drives Stocks Higher at the Close as Volume Slips

The Bank of England and European Central Bank kicked off the day with holding their rates steady. Neither rate announcement spurred much movement the reaction by the EURO certainly kicked off selling in the US markets sending the US markets to their lows of the session. Selling intensified throughout the morning as the EURUSD dove. Buyers were able to step into the market and were able to push the market back to the mid-point of the session. AAPL at the closed pushed the market back to opening prices as the company announced a review of its cash position. Volume ended lower on the session despite the buying at mid-day and AAPLs late day push. We remain in an uptrend and despite what you may see intra-day we’ll remain disciplined. AAPL has been quite the stock since the lows of 2009. It has been blamed for holding back the NASDAQ from hitting new highs. However, today it single handedly lifted the NASDAQ from its lows. Even in the last 15 minutes of the session it appeared the NASDAQ was ready to head back to the lows of the day when news hit regarding AAPL’s review of its cash. The stock did go ex today with its current dividend and with the news today it wouldn’t surprise me if a combination of a buyback and special dividend will be announced. Sentiment continues to run high amongst the bull camp. AAII bull respondents did slip from 48 to 43 with bears jumping to 29%. II Bulls hit the week at 55% (59% 5 year high) and bears coming in the week at 21% (16% 5 year low). NAAIM investment manager survey saw leverage come off the books to 95% long. Sentiment remains high here, but it can remain high for quite some time. Our uptrend remains in place and we have yet to see any major days of distribution. The same cannot be said for a few European indexes. The DAX, FTSE MIB, and IBEX all are below their 50 day moving averages with big time distribution. Europe may be cracking, but the US appears to be holding steady. Until we get signals of a market correction we’ll remain long. TICKER ST TREND CHANGE DATE CLOSE % SPY UPTREND NO CHANGE 2/7/2013 150.96 -0.13% IWM UPTREND NO CHANGE 2/7/2013 90.16 -0.33% QQQ UPTREND NO CHANGE 2/7/2013 67.30 0.09% USO UPTREND NO CHANGE 2/7/2013 34.68 -1.03% UNG DOWNTREND NO CHANGE 2/7/2013 18.54 -4.24% GLD DOWNTREND NO CHANGE 2/7/2013 161.84 -0.34% SLV DOWNTREND CHANGE 2/7/2013 30.46 -1.14% DBC UPTREND NO CHANGE 2/7/2013 28.44 -0.39% FXY DOWNTREND NO CHANGE 2/7/2013 104.71 -0.13% FXE UPTREND NO CHANGE 2/7/2013 132.92 -0.90% TLT DOWNTREND NO CHANGE 2/7/2013 116.93 -0.22% SLV changed trend today. Yes central banks have their printing presses in hyper drive, but we’ll follow our trend following signals.

S&P 500 Hits another High as Crude Oil Nears $100

Once again buyers support the market at the lows. It has been the trend as of late to find buyers as the market appears to be in free fall. Positive data from Case-Shiller did help the mood. Volume rose on the day across the board showing institutions were quite active in the market. Technology stocks, despite AAPL finishing in the green had a tough day with the likes of VMW, WDC, and STX had tough days. This market continues to hit new highs despite “overbought” conditions. The market now turns its attention to tomorrow’s release of fourth quarter GDP and the FOMC meeting minutes. Tomorrow will be a big day for the market with GDP and the Fed. Fed days are always fun with wild intraday swings. GDP estimates range between 1.1-1.5%, but even if GDP prints at 1.5% is still very pathetic. Despite all the Fed’s interventions the economy can only grow at 1.5% is really pathetic. The market may continue its trend tomorrow regardless of the GDP print. Knowing what the GDP figure will be won’t help you in tomorrow’s market. We could guess if the Federal Reserve does not change its language in its policy statement the market will continue higher. If the Fed hints at winding down its massive asset purchase program may be a reason for a decline, but it is anyone’s guess. We continue to be in an uptrend and until we get our sell signals we’ll stay on the long side of the market. We still have a few minor hiccups in the market right now. VMW, WDC, and STX were sore spots on the day and even with good earnings from F the stock couldn’t find buyers supporting higher prices. YHOO posted good results, but the stock gapped to the upside only to find itself lower on the day. Perhaps we are seeing some exhaustion, but not nearly enough to trigger a sell signal. Stay disciplined and keep your emotions in check! Short-term trends: TICKER ST TREND TREND CHANGE DATE CLOSE % SPY UPTREND NO CHANGE 1/29/2013 150.66 0.39% IWM UPTREND NO CHANGE 1/29/2013 90.05 0.06% QQQ UPTREND NO CHANGE 1/29/2013 67.16 0.01% USO UPTREND NO CHANGE 1/29/2013 35.29 1.00% UNG UPTREND NO CHANGE 1/29/2013 18.36 -1.02% GLD UPTREND NO CHANGE 1/29/2013 160.99 0.44% SLV UPTREND NO CHANGE 1/29/2013 30.32 1.57% DBC UPTREND NO CHANGE 1/29/2013 28.16 0.57% FXY DOWNTREND NO CHANGE 1/29/2013 108.05 0.07% FXE UPTREND NO CHANGE 1/29/2013 133.86 0.27% TLT UPTREND NO CHANGE 1/29/2013 117.6 -0.55% Crude oil – USO saw a big jump today along with SLV. Rising commodity prices will certainly squeeze the American consumer. Stay tuned.

S&P 500 Ends Win Streak as VIX Rises; Some Leaders Stumble

Small losses on the S&P 500 and Dow ended their win streaks as AAPL boosts the NASDAQ to close in the green. Durable goods orders were boosted by BA orders coming in better than expected. Disappointing pending home sales were blamed on low supply, but nonetheless there weren’t as many pending home sales as expected. The VIX was able to hold its mid-point despite the market getting support at the lows. There were a few troubling signs with 3D printers facing heavy volume selling. Recent long signals haven’t been working as well suggesting we may be in for the market to take a rest. Our uptrend is still intact, but we do have a few warning signs of a possible pause in the market rally. DDD and SSYS faced big losses today as these stocks have moved quite a bit from the 11/16 low in the market. It doesn’t matter if these stocks are the way of the future, for now the heavy volume selling suggests these stocks have further to correct. Today’s action is why we have our exit rules with our stocks. Outside of these stocks we don’t see too many trouble signs other than a few new longs not working immediately. KORS another leading stock had trouble today, but LNKD had no issues breaking out. It is very possible we are rotating into new names and this market will resume closing at highs by week’s end. Stay disciplined. Tomorrow we’ll get the Case-Shiller index regarding the housing market. The index has shown much improvement since the utter disaster back in 2008 and 2009. However, it will be Wednesday when we get a reading on fourth quarter GDP growth as well as the FOMC rate decision. Federal Reserve days tend to be positive for stocks and Wednesday shouldn’t be any different. Of course we’ll allow our signals guide us via price, but the reaction to the comments by the Fed should be entertaining. We aren’t about to call a market top or even a correction, but given the extreme sentiment readings last week and a few leaders getting hit the probability of a correction is greater. Stick to your game plan and execute. Short-Term trends: TICKER ST TREND TREND CHANGE DATE CLOSE % SPY UPTREND NO CHANGE 1/28/2013 150.07 -0.12% IWM UPTREND NO CHANGE 1/28/2013 90.00 0.07% QQQ UPTREND NO CHANGE 1/28/2013 67.15 0.22% USO UPTREND NO CHANGE 1/28/2013 34.94 0.46% UNG UPTREND NO CHANGE 1/28/2013 18.55 -4.97% GLD UPTREND NO CHANGE 1/28/2013 160.29 -0.22% SLV UPTREND NO CHANGE 1/28/2013 29.85 -1.19% DBC UPTREND NO CHANGE 1/28/2013 28.00 -0.04% FXY DOWNTREND NO CHANGE 1/28/2013 107.97 0.14% FXE UPTREND NO CHANGE 1/28/2013 133.5 -0.03% TLT UPTREND NO CHANGE 1/28/2013 118.03 -0.36%

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.