Stock Rally Continues from Fed Liquid...
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Apr
11
Jonathan Yates
Stock Rally Continues from Fed Liquidity Infusions
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All of the major indexes continue rising from the liquidity high of the minutes from the Federal Reserve Open Market Committee meeting.  There is still no end in sight to the  quantitative easing program of the Federal Reserve under Chairman Ben Bernanke, which presently entails the US central bank buying about one trillion annually in Treasury Bonds and mortgage-backed securities that no other investor will purchase at such low interest rates.
As a result, the Dow Jones Industrial Average rose more than 60 points today, the Standard & Poor’s 500 Index closed higher by more than 5 points, and the NASDAQ, finished higher by almost 3 points.  While there were plenty of bullish signs, developments by the closing bell had bearish sentiment at 69%, with bullish feelings at only 31%.  Interestingly enough, the three major indexes met the regular session close at 4 pm with engulfing, elongated positive candlestick patterns.
That bullish snorting was certainly pawing its way around the market in the regular trading day.
By 52% to 42%, advancing stocks outnumbered those declining.  For momentum traders, almost two-thirds of the stocks closed higher than the fifty day simple moving average.  Stocks reaching a new higher were 13 times greater than those hitting a new low.
Big Oil continued to be a big winner.
The weak currency  polices are making hard assets such as oil and natural gas very attractive.  As the chart below shows, both the exchange traded fund for oil, United States Oil (NYSE: USO), and natural gas, United States Natural Gas, (NYSE: UNG), have been very strong in recent market action.  This sector should do even better when economic demand picks up in China and other countries.  The oil and natural gas sector is already contributing much to the economic recovery in the United States as explained by this video.

 



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