$MSFT and $FSLR Lead the Market Higher

Unable to hang to the highs of the session stocks finish higher as volume jumps over Monday’s depressed levels. Wholesale inventories jumped more than expected in the month of February throwing a kink into first quarter GDP. Breadth on the NASDAQ ended in favor of the decliners despite the gains on the day. NYSE breadth ended in favor of advancers, but overall breadth has not been up to par with a rising market. Volume was below average, but above yesterday’s level showing interest in stocks picked up. However, the late day pullback from the highs did not leave us with a pleasant taste in our mouth. Regardless of how we feel about the market we are still in an uptrend and continue to operate as such. The two big movers on the day were $FSLR and $MSFT. $FSLR raised its guidance and the stock soared. It happens to be the third most shorted stock on the S&P 500. Then we have Mister Softy $MSFT jumping more than a point nearing $30. Volume was nearly twice its 50 day average. Both stocks were a big reason for the NASDAQ and S&P 500 finished in the green. Hard to say $MSFT is a growth name capable of moving substantially, but when it is a large component of the NASDAQ you have to sit up and take notice. Today’s economic data was essentially ignored with increasing inventories and the NFIB showing small business plan to hire is at 0%. Tomorrow’s release of the latest FOMC meeting minutes will be slobbered all over. When will the Fed begin to end or taper QErever? The fed has pledged to continue to provide stimulus until unemployment hits 6.5%. However, with Friday’s job report and the number of people leaving the labor force throws a monkey wrench into the Fed’s plan. Not to mention the QE plan has never been tested and risks can not be quantified. Time will tell and so will prices. Have a game plan and execute. Our uptrend remains in place and until we get a signal otherwise we’ll stick with our plan. Cut your losses short.

Stocks Rally to Close out the Week despite Lower than Expected Job Growth

The market was able to shake off a disappointing jobs figure on Friday morning failing to print 200,000 jobs. AAPL was another loser on the day slipping more than 2% weighing down the NASDAQ while the S&P lead by banks and energy was able to push higher. Banks continue to do well with the Federal Reserve buying their mortgage portfolios. For the week it was a monster move for stocks and a monster fall for the VIX. This market does not have any fear and traders are positioned for this market to continue to push higher. Small caps continue to dominate hitting new highs and until banks and small caps turn there is not a reason for this market not to push higher. It was a stellar week for plenty of stocks and there appears to be more gains had. However, since the 11/16 move off the lows (when we were close, but not close to a fiscal cliff deal) we have come a long ways. This is not to say we can’t continue to march along, but there are some things saying this market needs to digest some gains. The number of stocks above their 20 day and 50 day moving averages at least suggest a shorter term pull back. However, the number of stocks above their 200 day says something different. Price will dictate our actions, but it is always prudent to be on your toes. The VIX has been decimated with fear fleeing the market. VIX is simply an indicator of market position via options. At this point in time the VIX is simply telling us traders are positioned for an upside move. Albeit a crowded trade at this point, but big bets are being made for an upside move after the fiscal cliff deal. Unfortunately for the market crowded trades can work well in the short-term, but not so over the long haul. Short-term this market appears to have legs and will look for it to move higher. Another debt ceiling showdown coupled with warnings from Rating Agencies of a possible downgrade will be another treat dealt to us by DC. We would not be in this mess if DC only spent what it took in. Make it a great weekend!

NASDAQ Leads Market higher in Light Trade Ahead of Elections

Tomorrow’s Presidential and Local elections have been the dominating headline for much of the day as US Voters are set to usher in new and old leaders. The market on Friday sold the jobs report as the majority of the market closed just off the worse levels of the session. Friday’s session was quite bearish given what was to be perceived as a positive jobs report. At Friday’s close the market was in borderline oversold territory and today’s bounce appears to be a reaction to the heavy selling on Friday. Light volume ahead of tomorrow’s election is to be expected with bets not willing to be made prior to exit polling. We remain in sell mode and will continue to remain in sell mode until this market can find stable ground. Economic data was on the light side today with the ISM Non-manufacturing index was released. The service sector did expand, but at a slower pace than expected. Logically thinking would have had the market move lower, but we rallied on the news. It wasn’t until the end of the day where buyers showed up. It was on the light side as volume was well below Friday’s levels. Today’s action while in the green was not very bullish considering volume was so light. Tomorrow’s session will prove to be volatile if we begin to see exit polling contradicting the polls we have been seeing up until this point. In the end it will depend on who will come out and vote. Will it be the Democrats who outnumbered Republicans last election? Or will we see Republicans dominate the turnout? The question is why are we only stuck on a two party system? Cut your losses! Ride the trend.

Stocks Limp Into Month End After a Poor Showing for the Month of May

End of the month volume poured into the market at the close, but failed to end stocks at the highs of the session. GDP came in line as expected, but at a paltry 1.9% far from where this economy needs to be at for a sustainable recovery. Sellers had dominated majority of the session and for obvious reasons. The rumor mill continues to swirl as Europe tries to figure out a way to sort its mess. Bond yields slid to their lowest levels as US Treasuries continue to be a safe haven among investors. Stocks did find their footing by the end of the day, but the rally left a lot to be desired. Sentiment week over week tilted towards the bears this time around. AAII Bulls dropped from 30% to 28% and bears jumped back over 40% to 42% from 38% last week. The story with the Investors Intelligence survey isn’t the number of bulls or bears, but the number of folks who are neutral. Short-interest remains near 5 year highs despite the lack of bears in the market. A very interesting development nonetheless and something we’ll continue to keep an eye on. Tomorrow we’ll get May’s job figure and unemployment figure from the government. Economic news has been disappointing as of late and it is hard to think employment numbers will be any different. However, the government can manipulate the numbers so anything is possible. More importantly will come the reaction to the numbers and the price and volume action for the remainder of the day. We can have all the opinions in the world that sound logical and “right,” but at the end of the day only price matters. We need to be focused on what matters: price. Enjoy the weekend coming up and make sure you get out and enjoy life a bit!

Volume Fades But Stocks Stage Rebound After Yesterday's Loss

A boat load of economic news hit the market early, but it was retail sales creating a stir. Better than expected retail sales certainly did not hurt things today, but you have to wonder with shrinking personal incomes at some point the cycle will break. Volume was running about even with yesterday’s level, but end of day volume yesterday due to end of the month rebalancing kept volume under wraps today. Leading stocks fared well today and continue to act well despite four days of distribution on the NASDAQ. A good, but not great recovery as the uptrend remains with some warning signals.

Sentiment did not change much from last week with a slight shift from bears to bulls. Neither end of the spectrum is at extremes. Despite the run up we have yet to see a big push from Bulls. While we did see bulls hit 50%, but they were unable to stay above this level for more than one week. Even the Investors Intelligence survey has failed to get at 5 year highs of 62% . 51.1% of respondents to the II survey are bullish, quite normal for the survey. Sentiment isn’t going to tell you much here and it won’t until we hit extremes.

What is another interesting point here is the VIX has unable to hit new lows while the market has hit highs. This may turn out to be nothing, but it is interesting buyers haven’t become completely complacent here. In fact, the number of stocks above their 20 day moving average sits just below 45%. Hardly the frothy levels we were seeing last week. Given sentiment, the VIX, and distribution days it appears we may be seeing a market looking for more sideways action prior to breaking out. A reminder, breaking out could mean to the downside. Have a plan of attack and execute it.

The jobs report is next Friday, not tomorrow. CNBC will have to wait another week parading in “experts” talking about the jobs market. Get out and enjoy the weekend!