Investment Blogs

Mostly down day on Wall Street today, with the DOW down 74, the S&P down 2, and the NASDAQ up 11. I am not sure what kept the NASDAQ in the black.

Looking at the DOW, today was not as decisive a day as I would have liked. The MACD is still positive, and the upward trend is still intact. Anything could happen Monday. I would still be on the sidelines at this time though, as the RSI is still pretty high, so there may not be much upside left. Additionally, the MACD is very close to going negative. Current DOW chart is below:

The markets are mixed in early trading, with the Dow and S&P lower but the Nasdaq higher. Advance estimates on Q4 GDP came in at +2.8%, which is below consensus which was looking for +3.2% but still above last quarter's reading of only +1.8%. For those folks still calling for recession, GDP needs to either going to fall off a cliff or we are going to see some big revisions.

In other economic news, The Univ. Of Michigan consumer sentiment survey rose to 75.0 in January from 74.0 last month.

Earnings reports are being greeted with much cheer this morning. Despite a handful of better than expected reports, very few stocks are higher after reporting today. The few that are trading higher include: HON, EMN, and INVN.

But the list of disappointing reactions is larger and includes: RVBD, F, CVX, PG, SBUX, and MO.

The euro is higher this morning, and helping most commodities. Gold prices are up to $1732; oil prices are still above $100; and copper and silver prices are higher as well.

The 10-year yield has stopped dropping for the time being and found some support at the 1.93% level for a 2nd day. The VIX is fractionally higher to 18.75 and also looks to be bottoming.

Trading comment: I still think this overbought market appears a bit tired and in need of some sort of rest. If the market closes lower today it will be the first back-to-back down days since mid-December. That's a pretty long streak. What will be interesting will be to see how quickly dip buyers come in and look to get more invested on any market weakness. I suspect this first pullback won't gain much traction before rallying again.

Futures are essentially flat this morning.

Slightly down day on Wall Street, as the DOW was down 22 to 12,735, the NASDAQ was down 13, and the S&P was down 8.

The DOW had been up as much as 85, and surpassed my 12,800 target at 12,842. Now that the market has pulled back after eclipsing this target, it's possible we will see a significant correction. However, there is the chance the market will try for the 52-week high, or the 13,000 level first. The RSI is back below 70 (67.64), so it is not out of the question. I think tomorrow is the key day.

DJIA 12,779.02 +22.06 NASDAQ 2,812.38 -5.93 SP500 1,323.49 -2.57 Dollar lower. Commodities and precious metals higher. Stock market bulls had better get moving or the indices can drift lower today. GBG 1.21 +0.05. Reached target sell price. Sold at 1.21 for .27 per share gain. SDS 17.36 +0.07. Bought at 17.31 for scalp.

The market was higher in early trading, but has since faded back into the red. Yesterday's FOMC announcement provided some fireworks when the Fed said they would essentially be on hold with interest rates until "late 2014", and that they would remain extremely accomodative.

That isn't an explicit announcement of more quantitative easing (QE), but it sure is an implied one. Commodities wasted no time rallying, and everything from gold to silver to copper and oil took off. The CRB is up again this morning. Gold prices have reached $1725, silver and copper are higher, and oil is back above $100 to $100.50.

In earnings news, we are seeing positive reactions in stocks like: CAT, MMM, OI, JCP, and especially NFLX which is up 22% on a short squeeze.

Negative reactions include: T, VAR, UA, NVR, CTSX and SNDK.

In economic news, durable goods for December were better than expected at 3.0%, and last months orders were revised higher to +4.3%. Not bad. New home sales came in below expectations at 307,000, which is also below the prior months units of 314,000.

Asia was mixed overnight, while Europe is higher today on renewed optimism that progress is being made on Greek debt negotiations. The euro is also bouncing vs. the dollar.

The 10-year yield really plunged after yesterday's FOMC announcement, and today it is sliding further down to the low level of 1.95%. It is hard to tell if this is more a statement of a slowing economy or just the Fed pinning the long-end of the curve down with its 'operation twist'.

As for the VIX, it is up 2.1% this morning but still low overall at a level of 18.70.

Trading comment: I enjoy reading Jeff Saut's commentary each week. I have read him for years, and he often talks about these "buying stampedes" that we see in the market. Said stampedes usually last from 17-25 days, with very brief pullbacks along the way before eventually tiring out. Well folks, since this buying stampede started on Dec. 20th that is exactly what we have seen. And by my count today is day 25 of the current run. As such, I want to be careful about chasing things higher here. The market does appear poised for a rest. Hopefully that will provide a better opportunity to add to stocks that reported strong earnings and are poised to continue to lead.

KAM Advisors has long positions in: GLD, SLV, VAR

The DOW hit my target from weeks ago of 12,800 this morning. The high so far is actually 12,842. The RSI is now over 70 (over bought), however, this a break out type move, so that could be okay. The 52-week high on the DOW is 12,929. I wonder if we will hit that today. That should be the next resistance, followed by 13,000 (psychological resistance).

In my opinion, after this momentum stalls, it would be prudent to exit the market.