Market Snaps Losing Streak

On Monday, the S&P snapped a 5 day losing streak, and the Nasdaq broke a 4 day losing streak. The market opened up and rose for the first hour of trading, but the intraday pullback failed to rebound above the early morning highs. Instead, the market eased back down and closed in the mid to upper range for the day. 

Today, the S&P gained +11 points (+0.63%) while the Nasdaq climbed +28 points (+0.71%) The Dow finished the day up +129 points (+0.82%). While none of the 3 major indices closed above their 10 SMAs, the S&P and Dow staged their up moves today off of their 50 EMAs, and this could serve as a supportive springboard for a market rebound in December. 

Normally, the majority of stocks follow the market's action, but the current conditions show many stocks breaking out, others extended, and still others retracing to support (50 EMAs). This type of market is seen when the large institutional investors are doing some rebalancing of their holdings, especially at the end of the year. In these conditions, traders can take their clues form the individual stock's price action, so long as the trend is still up (which it is).

The Fed begins meeting tomorrow, and Wednesday comes the announcement on the quantitative easing program. There is likely to be some intraday market volatility after the announcement, so pay attention to your stops (make sure you have them on). Today's up day, while positive, has not changed the high risk that still exists for the general market.