General markets were up on higher volume. So far this year, whenever the market has had a setback and the action begins to look somewhat ugly, even with leading stocks breaking down, it has, on an index basis, quickly found its footing and then proceeds to baby-step higher, helped along by quantitative easing. The lackluster uptrend, such as is evident in the NASDAQ Composite has created a challenging environment where leading stocks flounder and junk stocks outperform.
With QE on full tilt, the precious metals ETFs SPDR Gold Shares (GLD) and iShares Silver Trust (SLV) moved higher as well, continuing their move off their lows. The question is whether gold and silver have seen their lows for the season or whether the Fed has enough gunpowder to prop the dollar which keeps a lid on precious metal prices.
It was reported today that bond king Bill Gross has turned bullish on longer-dated Treasury debt for the first time in months. Gross, who is manager of the world’s largest bond fund PTTAX at Pacific Investment Management Co., also known as Pimco, had been concerned that the 10-year bond would falter if the Fed were to slow their quantitative easing program. But the Bank of Japan’s aggressive plan to buy Japanese government bonds will spur Japanese investors to seek out higher returns in other markets overseas. One key market is the U.S. bond market where 10-year treasurys yield 125 basis points or more, which is attractive to the Japanese.
3-D printing companies SSYS and DDD both continued to move higher off their lows as both have recently found support at their 200-day moving averages. SSYS just barely traded enough volume for a bottom fishing pocket pivot (full details on pocket pivots at www.selfishinvesting.com/pocket-pivot), clearing its 50-day moving average in the process. Such marginal pocket pivots carry higher risk as they tend to be more failure prone. The current uptrend is weak, making stocks more vulnerable, so we would avoid taking big positions in any stocks at this time. Should one wish to test the waters with a small position, make sure it is within one's risk tolerance levels. But little exists in the way of strong buy signals, and SSYS is simply indicative of the marginal nature of this market when it comes to the action of leading stocks.