MV Weather Report: Fed Turns Sun Lamps on Market
Rain or shine, we review the day's biggest stock stories.
So nothing has changed: The market rallied, and investors are happy. Well, sort of.
While the S&P 500 was up 2% today, after an initial thrust to 882 -- a new high for this rally -- the S&P sold closed 10 points lower, at 873. If I were a bull, I would have liked to see the market extend to 890 - or at least close at the highs of the day.
On the Buzz and Banter, Professor Jeff Cooper gave his take on the action:
"We got the spike we were looking for to satisfy a potential Broadening Top formation on the S&P daily and hourlies with a marginal new high for the move.
"Then the 10-minute traced out Train Tracks (sell signal) while it is poised to close below the breakout pivot today."
The chart pattern Cooper is talking about can be seen below:
Click to enlarge
When looking for a turn in the market, I like to look at the rally's leaders: In this case, Apple (AAPL), Research in Motion (RIMM) and Amazon (AMZN); the latter 2 both traded down today.
Could they be signaling the end of the run?
Here's an excerpt from Jason Goepfert's article, entitled A Breakout Would Be Good... Right?
"The last 6 times we had an FOMC meeting, the S&P 500 typically responded in joyous fashion, closing in positive territory 5 times, with an overall average of +2.4%.
"But a cruel fact of life is that the hangover is never as much fun as the party, and over the next 2 days, the S&P was positive only 1 time out of 6, with an overall average of -1.6%. It would average -2.8% without including that one winning trade, which happened to give back all its gains and then some within 4 more sessions."
As I stated above, if I were bullish, I wouldn't have liked today's action. The market has been slow and dry, and it's quite possible that today's action was mutual-fund mark-up day.
Heads up on Exxon Mobil (XOM) earnings before the bell tomorrow; it will shape the tape.
Have a great night!
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