Current Stock market in a bullish channel
Since the start of New Year stocks have been barreling to the upside killing bears and short sellers alike in a hurry. The shorts have disappeared completely. The earning season is also reaping rewards. Most S&P 500 companies have hit high marks this month and continue to dazzle institutional buyers. AAPL, NFLX and others have blown street expectations.
The Feds have also decided to add more cash to a faltering economy thereby making life for incumbents much easier. They will keep the interest rates low for this year and possibly next year also. This has fueled a market rally but with tight closes everyday, which shows lots of accumulation in the stocks.
The economy is certainly on the mend, but without any oomph or a V shaped recovery. The employment situation still a mess and the rate stuck at 8.6 percent. The slow recovery is all but visible where manufacturing activity has picked up and the GDP is growing at the rate of 2 to 3 percent a quarter.
Major indexes are showing going higher on expanding volumes and showing accumulation by institutional buyers. There is more appetite for that than a month ago. There appears to be a rush not to miss something. This has carved a well defined bullish channel for SPX and RUT and other major indexes, though the market is extremely overbought here.
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