Bernanke speaks and market gaps double digits
Ben Bernanke spoke after hours not to unsettle traders, but the futures traders reacted overnight while you and I were in lala land and pushed them high enough to gap the market double digits in the morning.
This has been the story all along this rapid climb in the last few weeks. Bernanke said that the QE tapering will not be taken off unless the unemployment rate is below 6.5% or if the data at some future point shows a strong recovery and a strong labor market. The result today- a huge untradeable gap !
Finally IBD in its video commentary this evening relented to ” Market in confirmed uptrend” after holding back the checkered flag while the rally went unabted. Better be late than sorry.
When SPX and other indexes gaps like the way they did today, there is very little inventory to go after. Traders both long and short get frustrated and it shows. The market than just pulls back a little or goes sideways without allowing much movement. These gaps and dojis are all over the SPY chart and you can see that from the video.
However there was solid action in some stocks like GOOG which climbed much higher now to near all time highs. This is a cup shaped pattern and price should take out the previous highs. LNKD also broke out from a 7 week old cup shaped pattern amid heavy volume. The stock is gunning towards the 202 previous high which it should take out in next few sessions. AMZN also motored past to new highs. The action was solid in all major stocks and thundered all day except NFLX which rested in this noise.
Since we are making new highs, it remains to be seen if momentum players will hit the ball (SPX ) to 1700 which they have set their eyes long time ago. This is very close and realist goal for the momentum ball players at this point of time.