We’re at the height of the summer holiday season, and it seems much of Wall Street is away on vacation right now. Yesterday’s trading volume on the New York Stock Exchange clocked in at less than 800 million shares, marking the thinnest trading since the week between Christmas and New Year’s.
Stock prices remain near the mid point of their trading range and we don’t expect much to happen one way or another in the near term. That said, our indicators suggest share prices should have an upward bias in the short run and there are several potentially market-moving events this week, despite today’s early selling.
One key indicator pointing to further gains in stocks is the strong readings we’ve had on the weekly Advance/Decline Line for four weeks running. That tells us a broad swath or the market is moving higher. Echoing this, yesterday the average stock on the NYSE climbed 1.5 percent vs. a 0.55 percent increase on the S&P 500, which was weighed down by the drop in Hewlett Packard which was sparked by a scandal in its executive office.
We don’t know if the Federal Reserve will resume with quantitative easing with its policy setting meeting today, or if that additional pump priming will come down the pike later this year, but given the economic backdrop, QE II seems all but certain. Keep in mind that QE II will likely be good for stocks and may be why stocks have been as buoyant as they have been.Read more...
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