Courtesy of John Nyaradi
Big morning news was that China wasn’t raising interest rates and at home long bonds (TLT) rallied by 0.38%.
Gold (GLD) was up along with the energy complex.
The markets remain overbought and complacency is high with the VIX at 17 and change, approaching the levels of last April just before the spring/summer selloff. Breadth today was weak and the day ended with a late day selloff back to near term support on the SPX.
On the upside, the Senate moved the tax cut/stimulus bill forward and will possibly have a final vote tomorrow while President Obama says it will pass with bipartisan support. It better because a failure at this late date would be a severe setback for global indexes.
The Fed continued doing its part to keep asset prices on the rise with a $7.8 Billion round of bond purchases on the day.
Tomorrow we see reports on Retail Sales and the announcement from the FOMC meeting, and those items along with the tax cut bill could be significant market movers.
On a technical basis, most major indexes have broken to new highs which would point to higher prices ahead, however, the market is wildly overbought at the moment and a short term period of consolidation or correction would not be unexpected.
Disclosure: Wall Street Sector Selector holds positions in various widely held exchange traded funds and positions could change at any time.
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