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.

Monday’s Continue to be Tough on Stocks as the Market Close in the Red

The story of this uptrend has been Mondays closing lower. Volume was lower today, but even with Friday’s volume today’s trade was quite light. On the face of it we do have a market continuing to consolidate its Fed induced rally. Friday’s session saw sellers knock down the early rally and they were able to continue their operations today. Growth stocks as well as technology stocks saw the brunt of the sellers operation. GOOG escaped their wrath, but on the whole growth stocks were the ones under quite a bit of pressure. We continue to escape distribution, but we haven’t seen the push from growth stocks we normally see here. Many are close to breakouts, but as time progresses we’ll need to see them lead the market higher. There is still quite a bit of talk over the fiscal cliff and continued European worries. Europe’s woes will not be solved here any time soon. Deleveraging takes time if the masses are not able to withstand the pain needed for a quick recovery. The same goes for the United States. With Obama in the lead and the Democrats looking like they’ll take the senate it appears we won’t see any resolutions to our debt woes in the near future. Democrats if they continue with control will undoubtedly raise taxes and cancel and reduction in spending. While raising taxes may or may not raise revenues not cutting spending is what will add to the deficit. Now the real question will be how will stocks react? It is anyone’s guess, but if you stick with leading stocks and price you will not lose. The last week of September and it is hard to believe Fall is here. All of the gains in the month have come on only central banking days! It would be nice if the market could get some gains without the help from central bankers. In addition, it would be nice if High Frequency Trading was outlawed and stopped from distorting price and volume on our stocks. Mark Cuban said it best: “High Frequency Trading simply adds volume not liquidity.” Even with High Frequency Trading we still have an advantage and that being price and focusing on a leading stocks. Another week in this uptrend starts lower and with very little distribution we can’t help to think this uptrend will continue to march on. Cut those losses short.