U.S. Stocks closed modestly higher on Monday on light trade. Trading was a bit of a disappointment today since there was some positive economic news on housing and the Leading Economic Indicators. The LEI actually rose in December, while existing home sales were up over 6% in December, and the supply of homes fell dramatically to just over a 9 month supply from over an 11 month supply. Furthermore, it was reported that Pfizer is acquiring Wyeth in a deal among drug makers.
Early in the day, the Dow was up well over 100 points and the S&P 500 was up over 20 points. Unfortunately, these levels could hold. Furthermore, volume contracted, which is not a good sign for an up day. Now, the price charts show an ominous pattern, one that I love for daytrading, and the market direction appears to be pointing downward for Tuesday. Other news could certainly allow the market to move higher, but this is one set up I like to see on the charts for a nice 1 to 3 day directional move.
In other markets, the Dollar was pounded today as the Euro and British Pound made huge gains against the greenback, recouping some of their losses over the last week. The Dollar held steady against the Yen. Treasuries were basically unchanged to slightly lower in price today, resulting in modestly higher yields. Commodity prices were mixed today, with some strength in metals and soft commodities, while energies stalled out.
Scott Cole
www.bestdaytradingstocks.com
www.kungfutrader.com
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