Stocks had another quiet session ahead of the Fed announcement tomorrow as it was sort of the opposite of yesterday; today the indexes gapped down at the open and spent the rest of the session in a relatively narrow range. The S&P 500 fell 0.31% and the NASDAQ 0.14%.
The Labor Department said its Consumer Price Index was restrained last month by declines in gasoline and natural gas prices, after slipping 0.1 percent in October.In the 12 months through November, the CPI rose 1.2 percent. It had increased 1.0 percent in October, the smallest advance since October 2009.
The indexes remain in ok shape but not as gung ho as they were about a month ago; there is a case to be made either way here for the next move in the market. Here are the longer term charts, and why the NASDAQ is currently the easier read; aside from about 10-12 sessions the entire year it has remained in this nearly perfect channel. So if it gets to the bottom of said channel in any future correction, odds are it will be a good place to buy.
The volatility index spiked to the highest level since mid October as Fed days where some proportion of the population believe the Fed will act usually leads to a lot of gyrations.
Let's look at some individual charts via Marketsmith:
Facebook climbed after the Wall Street Journal cited unidentified people familiar with the matter in reporting the social-networking site would run its first video advertisements on Thursday. For those who are IBD type investors we might be seeing a cup formed on a "cup and handle" formation; i.e. if the stock stalls here and has a multi week consolidation/correction (the handle), we might see a very nice move out of that sometime in February or March. We'll see.
Gentex (GNTX) is a lowly auto supplier stock, but like the airlines this group has had a surprisingly good 2013. You can see a recent breakout here the past few days as it cleared October 2013 highs.
Looking at the day's big movers you can often find new ideas - today we have Zulily (ZU). What the heck is a Zulily you ask? A recent IPO of a company that offers flash shopping (deep discounts for limited times) catering to moms. There is an interesting background on this company via IBD; amazing it started business in 2010 and now is valued by the market at $5B. It is growing like gangbusters but this is the type of action that has people whispering we are in a new bubble.
Tesla Motors (TSLA) has been the stock of the year in 2013; as we close out the year it is in an interesting pattern, a potential "inverse head and shoulders". In this type of pattern if the stock clears a neckline it often will rally by a substantial amount. One could argue the neckline for this name was in the mid $140s so if it holds that area in the coming days and weeks it might have a good amount of room to run in early 2014.