Light volume and Federal Reserve propping continue to push the markets higher on the back of bullish ADP Private Sector Employment numbers. Private Sector Employment saw a solid gain of 297,000. The markets cheered this number but still opened initially lower on a very strong Dollar. As soon as the markets opened, Federal Reserve POMO started to push the markets higher. Light volume and new money flow for the new year have pushed the markets into a key double top. The SPDR S&P 500 ETF (NYSE:SPY) has hit the key $127.60 level which was the high from Monday. This should be short term resistance and a sticking point for the markets.
Also, helping the markets move higher was the Dollar. After opening sharply higher, the Dollar has fallen slowly lower. The markets trade inverse to the Dollar thus continuing to float higher. The PowerShares DB US Dollar Index Bullish (NYSE:UUP) $23.08, +0.20 (+0.87%). It made a high early in the day at $23.15.
Many commodity stocks opened sharply lower on the back of the strength in the Dollar, however, many have moved to the flat line if not positive as global optimism has grown and the Dollar has pulled back. The Federal Reserve continues to have a bubble making policy where they are artificially inflating asset prices. While this will end worse than the housing market collapse in 5 or more years, in the short run it works to prop the economy up.
Gareth Soloway
InTheMoneyStocks.com
