Highly volitile market

Investors started the day with positive housing data, as the Case Shiller Index showed a 5.5% year over year increase in residential real estate.  However, Consumer Confidence was well below expectations, which is likely still influenced by Washington’s dysfunctional performance.  The S&P 500 is trading above 1500 and the Dow is up 50 plus points with its eye on 14,000.  Stocks have been screaming to the upside and are ripe for a pullback.  Tomorrow is Fed Day and Friday is the Labor Department’s monthly Jobs report.  Either of those could be the catalyst to propel stocks that much closer to their all time highs, or spark a sell off after the big run up they have been on.  mortgage bonds are still below the 200 DMA, but signaled a possible turn around yesterday so we will be looking for follow through.  We will start new transactions with a cautious floating bias.