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Despite the Euro continuing to slump, stocks are bouncing this morning after yesterday’s selling. Since last Monday’s decline down to 1202 on the S&P 500, we have seen the lion’s share of the gains up to 1269 held intact, with bulls on the whole taking advantage of the traditional holiday light volume trading. However, a lingering issue for this market is the continued unresolved divergences that I highlighted in my video recap last evening. In addition to the weak Euro and strong Bonds, the high growth, marquee leaders since the 2009 bear market bottom are flashing ominous signs. Even today, stocks like AMZN BIDU CRM as notably underperforming the tape.
Many traders, especially the institutional ones trading size, have closed up shop for the year. So, I am not inclined to overanalyze each tick in the market at this point. However, I do believe these issues need to be at least somewhat cleared up if the bulls are going to sustain anything more than a temporarily holiday bounce.
