Stocks had a quiet session Wednesday, digesting another huge V shaped bounce from the middle of last week. The S&P 500 fell 0.06% while the NASDAQ gained 0.13%. After large, quick moves up bulls want to see a bit of digestion before embarking on the next attempt upward. News flow was slow for the day.
Stocks continued a very volatile week, as we saw another bounce today off short term oversold levels. The S&P 500 added 1.13% and the NASDAQ 1.77%. Facebook's large gain, which we discussed yesterday, helped lift many boats in the tech sector - Twitter and LinkedIn both had very large gains. January will be a down month and some believe a bad start to the year bodes ill for the entire year but some analysis today noted: "In 12 of the 21 Januarys since 1960 in which stocks traded lower have seen the subsequent 11 months trade higher including four of the last five instances."
Weak guidance by major technology bellweather Cisco (CSCO) did little to slow down this market. Janet Yellen testimony to the Senate Banking committee went as expected... meaning dovish as can be, and quantitative easing in our lives for a long time to come. The S&P 500 gained 0.48% and the NASDAQ 0.18% despite the weakness in the technology sector. The Russell 2000 was down 0.07% which was a tiny fly in the ointment. "It's important not to remove support, especially when the recovery is fragile and tools available to monetary policy, should the economy falter, are limited given that short-term interest rates are at zero," Yellen said.
Stocks had mild gains in a very quiet session Monday, following 2 days of wicked volatility late last week. Volume was low as this was Veteran's Day and the bond market was closed. The S&P 500 gained 0.07% and the NASDAQ 0.14%. News flow will generally be light this year but some focus will be on Janet Yellen's confirmation hearings in the Senate - although it can be assumed after the normal political song and dance she will be approved for the post.
The steady beat of this market continues to the upside. We barely are getting chances to work off extreme overbought conditions before buyers step in for a new round. Yesterday was only the second down day of this near vertical rally and buyers came right back in today. News flow continues to be light, and focused on individual earning reports. For the day the S&P 500 gained 0.33% and the NASDAQ 0.56%. There was an interesting report today on how investors are piling into margin as the market continues to elevate - we saw this happen in 2007 and of course 1999 to the extreme. It can go on for a long time of course but this is usually a longer term bearish signal.