Market Recap Feb 8, 2013
SPX continues to grind higher. The haphazard formation of Megaphone like pattern has clearly resolved to the upside with today’s move. Usually these patterns are bearish in nature and lead to lower prices. The earnings season is almost over, and now the attention focuses back on the economy and Europe and other fiscal matters. What has driven this market to new highs? The earnings. When the earnings are good, stocks get bought, and that in turn pushes the indexes higher. It is as simple as that.
It is not the US economy itself as it is claimed by the politicians at the helm. S&P 500 companies drive almost 45% or more income from overseas markets like China and India and Far East and rest of the world. Though there have been some improvements in the US economy but they are at a slow, and grinding pace.
The stock that changed the market flavor and NASDAQ last two days is AAPL. It has based at 450 levels for the last 2 weeks and now is streaking higher towards its downward moving averages. The move started yesterday based on David Einhorns attempt to push AAPL to release cash from its balance sheet to stock holders and do something about it who have been holding a declining asset. The market took it as a positive and the stock pushed higher – it just needed a catalyst.
GOOG has been making new highs and showing strength and commitment. GOOG is now at its all time highs and still looks strong.