Date: Sun, 19 May 2013 10:14:31 +0200
- Trader Mike
STTG Market Recap May 14, 2013
As mentioned the past few days the market was internally correcting even though the indexes were not going down much. We could see this as the NYSE McClellan Oscillator dropped nearly 40 points and various sectors retreated as others took their place as daily leaders. So the market corrected via time (sideways) rather than price. That set up Tuesday's action where a catalyst in the name of hedge fund manager David Tepper drove the market to new gains. Who is this man? Back in September 2000 as Quantitative Easing program #2 was on deck, he came to CNBC and said either the market will go up due to a better economy OR the market will go up due to the Federal Reserve. He said it was a time to be "balls to the wall" aggressive - for those around back then you know what happened; the market rip roared for months on end until QE2 ended. Well now we are in QE infinity so investors were interested in his take. Let's just say he was no less bullish today than he was in 2010. The S&P gained 1.01% and the NASDAQ 0.69%.
Here is video of the first part of Tepper's interview:
As for our indexes - they roared again to new highs. The S&P 500 broke out of a 4 day "bullish hammer" where S&P 1623 was the floor for those very short term oriented traders and once this index broke the upside of the 4 day range a flood of buying came in.
Obviously things are extended in terms of our channel, even as we are not immediately overbought on some secondary indicators. But the bigger story is the indexes are in healthy condition after major issues in mid April and this allows for individual stocks to flourish. We are due for some pullback at some point as this has been almost a straight shot 8% rally since the lows in April.
In a perfect scenario you want to see leadership from the cyclical sectors - we are now getting that, even energy joined along today. Other areas: financials, consumer discretionary, and industrials. We saw a bit of a rest today in technology but again as one sector rests, another takes over that day - that is bullish activity.
Original post: STTG Market Recap May 14, 2013