Home Prices Jump as Stocks End in the Green in Extremely Light Turnover

Early morning economic news did help the market at the open. However a disappointing consumer confidence, Richmond Fed, and New Home sales figures did halt the enthusiasm. Europe continued to remain in no man’s land with Spain leading the market lower. If I had to make a guess the IBEX 35 would be the next stock index to see a major break lower. The FTSE MIB may not be that far behind. Back here in the States the story of the day is the extreme light volume as the Dow hits all-time highs. There simply isn’t the institutional interest in the market here despite the bulls CNBC parades out on their sets. A last minute push from the buyers pushed the markets to the highs of the session. The Dow once again led the way with Small caps lagging behind. We can debate the validity of this market rally because of QE or we can simply just take the gains. It is up to you. I’d rather take the gains and have an exit strategy. SPLK gave up majority if its breakout gains from yesterday. Volume was well above average and this type of action has become the norm as of late with breakouts. LNKD has tried to continue to hit new highs, but has struggled as of late. FLT has been able to escape the reversal fate and continues to act like a true big wave trading stock. The market is not making it easy hanging onto these stocks, but if you stick to a rules based trend following system you’ll avoid pitfalls. Volume was once again lower on a day where the markets close in positive territory. At this point you could simply ask if volume is higher or lower and you’d know whether or not the market was up or down. QE has certainly thrown a wrench into the markets, but it has certainly pushed away volume. Sure option volume has jumped, but it has not replaced the volume lost since the Fed’s printing began. Price is number one in our books, but it does beg the question will volume ever return? We remain in an uptrend and will continue to stick to the long side.

Stocks End Recoup Some of Monday’s Losses; Volume Mixed

The markets did their best to rebound from Monday’s sell off, but fell short. Volume ended mixed on the day with the NYSE volume coming in lower and the NASDAQ coming in better than Monday’s levels. Economic data was disappointing with Consumer Confidence and the Richmond Fed disappointed with lower than expected readings. Case-Shiller report on housing was better than expected, but still showed housing prices fell overall. Today’s market closed was a bit disappointing as the major indexes clsoed off their highs. While today’s green close is a step in the right direction there is much more work to be had if this market wants to rebound. Angela Merkel’s debt sharing comments did send stocks immediately lower, but the market was able to rebound and push higher. Perhaps mutual funds looking to deploy cash for month end reporting had something to do with the move, but anything is possible. The action today was very much like Friday’s market action trying to recover from prior day losses. We remain in sell mode despite the rally today. Tomorrow we get durable goods figures at 830 followed by pending home sales at 10am. However, market pundits will likely look to Thursday’s arrival for first quarter annualized GDP figures. The market is looking for growth of 1.9%. Our economy is not humming along as it should and worse of all we are bumping up against the business cycle. Every 4-6 years the economy enters into a slowdown and by all indications our economy is about to enter into one. Any disappointment should usher in lower equity prices, but we’ll simply follow where the market will take us. Who knows? A very negative number could usher in a new round of quantitative easing! In the end price matters and rules above all else. Price destruction going on with European stock indexes is quite extraordinary. Germany, Spain, and Italy are three looking mighty vulnerable at the moment. All three remain in downtrends and especially scary is the German DAX index. The Germans are the ones holding up the Euro and with the weakness in their stock market certainly speaks volumes. Europe will drive a lot of the conversation and certainly will weigh on the minds of traders globally. Cut those losses short and enjoy the ride.