SUMMARY:
- Only one day off and its back to work.
- GDP revision solid but less than expected.
- Jobs not showing robust growth as weekly claims hold at higher levels.
- Volume iffy as stocks try to start next leg.
- Long weekend ahead, low volume this week leave stocks vulnerable on Friday.
- Personal income and spending, Michigan sentiment will give investors something to chew on ahead of long weekend.
Stocks resume move higher after modest shakeout.
SP500, DJ30 and SP600 were just starting a bit of a lateral move NASDAQ barely took a day off before buyers were back in action, sending stocks higher. It was no blowout as NYSE volume was lower while NASDAQ volume edged higher, but that is pretty much in keeping with the character of this entire move. Stocks started higher, slipped into neutral about an hour into the session, and then rallied to session highs in the last hour. A late session fade took back some of the gains, but stocks held the break above the intraday consolidation at the close.
This resumption of the upside move continues the bullish action even on those sessions where the market finished lower as on Wednesday. Oil was higher and the Fed speakers made clear they still felt more rate hikes are in order (leaving the 'conundrum' of how many hikes are still planned), but that was offset by a 'just right' GDP revision that was higher but not at the highest estimates and some solid earnings reports. IN short stocks had their choice to go with the good news or the bad news and in keeping with their current state of mind they went for the good.
Breadth was solid as the small caps posted a 1.4% gain. SOX contributed with a session leading 1.9% move on one analysis that puts world chip growth at 5.4% versus the original 3.9% prior forecast. Chips have been recovering but then again, all tech sectors have recovered in this rally as techs took over leadership from SP500 after the large caps looked ready to lead but then abdicated the role just when it needed to make the move.
Speaking of the large caps, SP500 recovered the April high (1192), retaking that critical level after a one-session move above that resistance. Unlike Wednesday when SP500 faded, volume as was lower. It was still very low overall, not showing much in the way of accumulation or distribution. Basically it drifted higher with the bullish bias pervading the market as it moves higher.
That pretty much characterizes the market right now: moving higher with a bullish bias though not powering higher. Price/volume action remains bullish, but volume remains low overall. Hardly a perfect situations but since the rally off of the October 2002 lows lost momentum in 2004 (when the Fed started hiking rates), there have been few moves that you would characterize as perfect. |
