BAC and YHOO Soar as Stocks get back on the Winning Track

Poor housing data kicked off the morning with Mortgage Applications falling along side Housing Starts and Building Permits. However, the data wouldn’t keep stocks from ending positive as Bernanke’s testimony and continued to press the Fed would remain accommodative as long as possible. Gold and silver didn’t buy the Fed’s Chairman Statement as both precious metals turned lower. YHOO shined after its earnings report Tuesday night. BAC jumped as well after reporting earnings earlier in the day. Volume was mixed, but NYSE volume can be attributed to the huge turnover in BAC. Tomorrow is a new day and the evidence we see continues to have us operate on the long side of the market and there is no sense in fighting it. EBAY and INTC reported earnings and the reaction is disappointing so far. EBAY is nearly down 5% after guiding EPS lower for the third quarter. INTC missed on revenues and while it is not trading down 5% it is in the red. On the upside IBM reported earnings and the stock’s reaction is quite positive. The stock is hanging above 200 price level. It will be interesting to see if the stock can hang above this level at tomorrow’s open. SCSS reaction after earnings was disappointing and the stock is down more than 8%. Quite the moves here in after-hours trading making tomorrow’s open very interesting. A quick note on sentiment from the II survey as bulls jumped above 50% while bears went under 20%. Last week we saw a similar spread between AAII Bulls and bears. We’ll post these numbers in tomorrow’s commentary. Sentiment is a tough gauge for market tops as they often hit extremes as the market continues to hit new highs. It does appear we are nearing an extreme point. An area of cautionary tone is the amount of stocks above their respective moving averages. At today’s close nearly 87% of stocks were above their 20 day moving average. 75% of stocks were above their 50 day while 79% of stocks were above their 200 day moving average. We are certainly at a point where a normal correction would occur. Will it occur tomorrow? It is anyone’s guess, but it’s a friendly reminder to make sure you stick to your game plan. Ben Bernanke is keen on keeping the market away from hearing taper talk. Will the Fed chairman simply just announce the taper out of the blue? Who knows, but at this point it seems likely as any mumbling of a taper sends traders scrambling. Cut those losses and ride your winners.

Volume Disappears as Stocks Recoup Majority of Monday Losses

In fine QE fashion stocks rebound in very light trade. Positive housing data did help the market even though growth came from multi-family homes. Industrial production grew at a faster pace than expected. Today was the first time we had economic data come in better than expected. Sellers disappeared paving the way for the market to float higher throughout the day. Volume disappeared falling more than 20% on the NYSE and 15% on the NASDAQ falling right in line with QE trading. Our uptrend remains in place for now and we remain ever confident in our systematic approach. Gold and silver rebounded as well as many other commodities after Monday’s big decline. The decline in gold was a 7 sigma move! Either metal was unable to capture majority of losses like the Dow Jones, S&P 500, and NASDAQ. I for one would love to see commodities in general move lower. Lower prices of things we need like food and energy can only help those who don’t own assets benefiting from the Fed’s ZIRP and QE. Lower prices for commodities continue to be highly probable and who can’t smile at lower prices at the pump? Earnings after the bell failed to inspire buyers. INTC closed the after-hours session higher by .71%. However, INTC was up more than 3% after reporting earnings. YHOO pushed higher initially after reporting earnings but the stock fell 4% by the end of the after-hours session. CRUS released earnings disappointing the street finishing lower by almost 11%. We’ll see what tomorrow brings for these stocks and the rest of the market. Tomorrow we’ll get the release of the Federal Reserve’s Beige book. There are few speeches tomorrow by Fed members and likely get a few headlines. Outside of the Beige book it is a relatively quiet day in terms of economic news. Before the market open we’ll get earnings from BAC and we’ll see if the stock follows C or GS. BAC has been a leader in this rally and has been an important piece to this rally. If this market can build upon today’s gains it will bode well to recoup all of Monday’s losses. Of course, we’ll follow our strategy and follow price. 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%

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.

Stocks Slide in Last Hour of Trade, but End Higher on Volume

Current uptrend logs another day of accumulation

Late day selling dampened the mood, but an overall positive day in the markets. Volume jumped across the board as the market mostly cheered about positive earnings reports and tepid inflation readings. Import prices were relatively in-line with expectations despite the overwhelming talk about the Federal Reserve second round of monetary easing. The late day selling is not surprising considering the move in the markets, but the action from stocks post earnings reports leaves a sour taste in the mouth. Even with the weak close the market is still in a solid uptrend.

The weak close suggests we may see a pull back tomorrow. The chances are good we see the market take a breathier. Consolidation is a necessary process for the market to undergo as we simply cannot go straight up. These periods can last a few hours in rare cases to a few days. As long as we do not see market leaders collapse and distribution the resting period is quite normal action. Pay attention to your stocks, if they begin to weaken take notice and make sure you are taking profits.

The earnings curse once again hits this quarter with JPM, IGTE, and ADTN reversing after seemingly good earnings reports. JPM stock is far from one we would like to be long, but the action in IGTE and ADTN both leaders are slightly troubling. Both were able to find support at their 50dma, but their charts are now damaged. It will take some time to repair the damage done today, but it isn’t something we would want to stick around to wait for. We’ll need to see the stock tighten up and form another base before we would get long.

Another big deal of the day was AAPL stock hitting the $300 market. The stock was able to hang onto the mark as the company said it would release a new operating system. AAPL stock has been a stalwart of this market rally and has yet to suffer any major setbacks. If this market is to go higher, we’ll need to continue to see strength in the market.

In a surprising move a deal for YHOO stock surfaced after-hours pushing the stock higher by 13%. The move will certainly help the NASDAQ tomorrow, but the question will be if the rest of the market will respond positively to the bid for a beat up technology stock. On the other hand you have ORCL posting a strong day without a takeout rumor. Ideally, you want to own a stock that is strong and not guess whether or not the stock may be taken out.

Be mindful of your losses, always cut them short.

Top Current Holdings With Total Returns That Closed Higher Today: JKS 140% JOBS 65% LGL 64% RES 57% MIPS 47% SOL 41% ISLN 31%, IVN 30%, NSU 24%, CGNX 21%, XXIA 21%, GBG 20%