Tick tock. Another day the market is open and goes up. Essentially the same story as the entire month of October - there have only been 2 down days since this rally began in the S&P 500. The S&P 500 gained 0.56% and the NASDAQ 0.31%. Nothing really new to add to the overall market analysis here; we are in a major uptrend of parabolic nature, and you are seeing rotation under the surface as different groups take turns being leaders each day. No one is worried much about tomorrow's Federal Reserve decision as there is zero expectation of nothing but full steam ahead from the Fed. IBM was a highlight today as the massive DJIA component announced a huge $15B addition to its buyback program. The only major economic report on the day were monthly retail sales - they were above expectations but mostly due to iPhone sales...
Tuesday was a rotten session for the bull case. Up through today there was at least a small subset of stocks that in general were relatively immune to the selling but today those were the hardest hit stocks. The S&P 500 fell 1.23% but the NASDAQ was torched for 2.0%. Recall we have been saying the NASDAQ has been outperforming by a large margin but usually these 2 indexes move much more in line. Well today the NASDAQ began to "catch up" to the S&P 500; of course beforehand we don't know which index will catch up to which; i.e. the S&P 500 could have just as easily outperformed the NASDAQ to the upside ... but that would required our friends in Washington D.C. to be compliant. Economic news flow remained light; it is all about D.C. for now.
Stocks rebounded Thursday from a 5 day selloff but it was not exactly a roaring rebound. In fact if not for a big rally in the last 10 minutes stocks would have barely finished in the green. The S&P 500 gained 0.35% and the NASDAQ 0.70%. It was a very volatile day as we continue to see some churning under the surface. Some of the comments from politicians regarding the federal budget impasse hurt the market today but the general idea is these politicians do this every time and eventually after all the posturing will get to some form of a deal.
There has been a peculiar pattern in the market the past two weeks where there is always a mid morning selloff, and that usually marks the low of the day. Today was another example where stocks gapped up, sold off quickly to their lows around 10:15 AM, rallied a bit, then retested those lows near 11 AM and then rallied much of the rest of the day. Today's reason was the same old, same old - a Fed speaker who said something positive, i.e. QE tapering might not be as near term as September. We remain in a hostage situation with Fed member comments dominating the market. By the close the S&P 500 gained 0.28% and NASDAQ 0.39% but this was one of those days the indexes did not tell the tale. Breadth on the NYSE was actually negative by nearly 600. Apple and a few other big names helped to lift the indexes.
Stocks had a positive session Friday, working off a gap down to begin the day to rally in the last hour creating a green close. After yesterday's significant pop even small losses would have been fine today - the main thing was not to give back a large portion of yesterday's rally. All systems go for the bulls now. A disappointing employment report did little to hurt the market, other than a few hours although it caused a big rally in U.S. Treasuries (pushing down their yield) as some believe the data pushed of the tapering of quantitative easing for a few more months. The S&P 500 gained 0.16% and the NASDAQ 0.38%.