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MARKET WRAP UP 10/11/10
The stock market on this Columbus Day saw no great epiphanies or discoveries that would forever change history. Instead, the broad indices simply digested the gains they made last Friday. Despite the fact that we have become accustomed to perpetually light broad market volume, today was actually the most tepid volume that we have seen since last January. Thus, I am sure you can understand my lack of eagerness about inferring too much from today’s price action. For all intents and purposes, the market ran in circles today, collectively speaking.
Individually, however, was another story. Despite weakness in the energy and financials, we saw some impressive breakouts on strong volume in the commodity, solar and semiconductor spaces. As I noted early in the day, the small-cap China stocks stole the show, as many of them broke out of multi-week bases with spectacular strength.
Going into Tuesday, the bulls must continue to hold above the key 1150-1160 area on the S&P. The longer that they can do so, the more likely it is that the remaining stubborn bears and underinvested bulls will throw in the towel and start chasing this market higher. As you can see on my updated and annotated daily charts below, the leading indices and sectors, save the financials, serve as evidence of a shift in the market’s character away from the range-bound market that we saw this summer, and towards a market trending higher.
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Agree that the trend is higher.. can’t fight the tape. However, doesn’t it concern you that banks aren’t participating? don’t they know more about the underlining strength of the economy than any other sector? After all, they are in bed with the FED. I would tend to look at their weakness as a warning sign.
For us short-term momo traders, it doesn’t matter a lot, but just thinking big picture.
Bought some YGE.