A positive sentiment report from the National Association of Home Builders (NAHB) helped propel stocks to the highs of the session. Prior to the NAHB report the Empire Manufacturing index jumped more than expected. However, a deeper look into the report showed some serious cracks. It wasn't until after 2pm where the trouble began to start. A headline from the Financial Times stating the Federal Reserve was set to announcing taper plans on Wednesday sent the market into a tailspin. Nearly wiping out the day's gains the market was able to close just under the mid-point of the session. Volume was higher than on Friday assisted by the intraday volatility. We remain stuck in neutral as this market is desperately looking to find a new trend.
Tomorrow we'll get a boat load of economic data, but all eyes will be waiting on the release of the FOMC policy statement. To taper or not will be the hot topic across the blogosphere and financial media. No one knows other than the Fed Chairman and the rest of the voting board members. If the FOMC does taper is it guaranteed the market will go lower? While it may seem logical for the market to go lower is it a given? We'll get a trend sooner or later, but no one can guarantee where the market will head next.
There are a few stocks looking decent here regardless of the increased market volatility. Learn to embrace volatility rather than fear it. Volatility is our friend and we'll use it to our advantage. Many will fear market volatility as we embrace it. Learn with Big Wave Trading how to embrace volatility.
We are certainly looking forward to the fireworks the market will provide this week. We'll be ready to take on the challenge we call the market. A strong process relying on piling onto winners and cutting losers produces fantastic results. Have a great week!
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.