05 Feb So much for the pullback in stocks
So much for the pullback in stocks. The fear of European politics taking a turn for the worse seems to be irrelevant today. Yesterday’s drop was erased by this morning’s open as the Dow is up over 100 points and closing in on 14,000 again. ISM came in very close to estimates, so no bad news allows stocks to keep momentum. It seems inevitable that indexes will hit their all time highs relatively soon. The Dow needs to see 14,165, and the S&P 500 needs 1565. The concern for equities is the pace they have been on, so many are expecting a decent correction. The question is, will it be before or after the all time highs have been hit. mortgage bonds traded right up against the 200 DMA, only to be pushed lower this morning again. Bonds have been stuck in a 60 basis point range for about 7 trading sessions now. We will maintain a floating bias as long as prices hold in this range.