China Data Causes Third Straight Tuesday Gap
The stock market opened higher for the third straight Tuesday in 2012. The SPDR S&P 500 ETF (NYSEARCA:SPY) is trading at $130.03, +1.02 (+0.79%). Since the new year, it seems the up days come on Tuesday and then consolidation floats the markets neutral the rest of the week. We will watch and see if this pattern continues to play out.
Last night, China reported better growth than expected. The market rejoiced as the fear of a hard China landing faded into the distance. As of now, China and Europe are the keys to the U.S stock market. U.S. economic numbers mean almost nothing.
The market is in a melt up period. The volume remains light which tells intelligent traders that institutions are not buying but definitely not selling. Eventually, the market will break dramatically lower, but the charts are not saying it will happen in the short term.
Financial stocks are the weakest sector following earnings from Citigroup Inc. (NYSE:C) this morning. Last Friday, JPMorgan Chase & Co. (NYSE:JPM) also reported earnings that disappointed Wall Street. These stocks are pulling back today but not hurting the markets much.