Melt Up Continues; 6th Straight Weekly Gain On Wall Street
STOCK MARKET COMMENTARY:
FRIDAY, NOVEMBER 15, 2013
MONDAY-WEDNESDAY’S ACTION: Market Is Strong
Stocks rallied on Monday helping the Dow Jones Industrial Average notch another record close. The bond market was closed in observance of Veteran’s Day. Amazon.com (AMZN) made headlines when the company said it inked a deal with the US Postal Service to deliver packages on Sunday. The news came ahead of the holiday shopping season. A separate report showed that online shopping is expected to grow several fold over the next few years.
THURSDAY & FRIDAY’S ACTION: Yellen Supports Meltup
Stocks rallied on Thursday as Janet Yellen spent the morning testifying on Capitol Hill. In case you missed nearly three exciting hours of Dr. Yellen’s testimony – It can be best summed up in two words: Melt Up. The Q&A went something like this: Q: Blah, Blah Blah, A: Meltup. Q: Blah, Blah Blah, A: Meltup. Q: Blah, Blah Blah, A: Meltup. so on and so forth. It is now abundantly clear that Yellen is just as/if not more dovish (supports QE),than Bernanke. From our point of view, the market remains very strong and it would be foolish to argue with this tape. Separately, it may be possible that housing stocks are trying to bottom if the Fed is able to keep rates low. Take a look at: XHB, TOL, DHI, LEN, to name a few. Economic data was light, weekly jobless claims slid by 2k to 339k which bodes well for the jobs market. Stocks continued to Meltup on Friday helping the S&P 500 enjoy its 6th straight weekly gain. NY manufacturing missed estimates which supports the argument for the Fed to continue QE for the foreseeable future.
MARKET OUTLOOK: SPX Approaches 1800
The market is very strong and, in the short-term, is getting more and more extended by the day. We will monitor the health of the market to see if this turns into another short term pullback or something more substantial. Remember, we focus more on how stocks react to the news than the news itself. So far, the action has been very healthy which bodes well for this very strong bull market. Please note that our goal is to remain in sync with the broader trend of the market (up or down) and not get caught up with the minutiae of changing labels on the market status very often. As always, keep your losses small and never argue with the tape.