A positive housing start figure gave a big boost to the futures this morning including homebuilders after housing starts jumped 12% month-over-month. Initial jobless claims fell more than expected and despite a very negative reading out of the Philadelphia Federal Reserve manufacturing index the market was able to push higher. Volume on the indexes rose above average across the board, but overall volume still remains anemic. By 2:30 the market was at its highs for the session only to be disrupted by selling at the end of the session. While the end-of-day action was not ideal it was still a very good session for the market.
The move in the market today has, in our minds wiped out all the distribution days we have seen in the past four weeks. Any distribution here we'll begin to count and watch carefully. The lows of this week must hold as well if this market wants to continue hitting 52 week highs. You'll hear plenty of pundits tell you where they are predicting the market should head, but they'll be wrong. Predictions are for those who need to feel smart and need to feel they know more than you. If predictions were often right you'd have a heck of a lot more "wealthy" traders sitting around. Know what you are trading, where your entries are, how much to trade, and where you exit and forget the noise generated by Wall Street.
Tomorrow we'll get options expiry and a boat load of volume. Options expiry is a day where volume can be completely ignored. It will also be interesting to see how price reacts to the volume when we have raced higher after the Fiscal Cliff "can kick" solution. We can only trade off the current price information we have and not what we "think" may happen. Anything can happen and will happen and we accept this in our trading methodology.
Get out and have a great weekend!
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.