Jerry Samet
12-18-2013, 08:30 PM
The market was generally slightly lower before the Fed announcement. They will do a small tapering but continue easy money policy for the foreseeable future. The markets liked what Bernanke had to say in his press conference and began to rally. The SPY lead the way with a gain of 1.66% while the COMPQ rose 1.15%. Volume was higher and above average across the boars, so it was a day of accumulation. The New York averages went into new high ground so IBD went back to a rally call on a fail safe rally. Leading stocks did well also but slightly underperformed the overall market with the leaders index rising 1.20% on higher but still below average volume. The index regained it’s important 17dma, but it would have been better to do it on above average volume that would have shown stronger conviction. The RS line of the leaders continues to lag. Today’s rally was good but we will have to see if it turns out to be more than just a reaction to the Fed. It is hard to get a real correction when so much money is being printed as we have seen several attempted declines that were enough to knock you out of many stocks but were quickly reversed by the Fed. There are attractive stocks to buy right now and it looks like stocks will head at least somewhat higher in the short term, but in this environment a degree of caution is a good idea. Jerry