[video] Stocks Keep Moving Higher After Fed Taper
Written by: Debra Borchardt
Tickers in this article: DIA QQQ SPY
NEW YORK ( TheStreet) -- U.S. markets continue to shake off negative news and Greywolf's Mark Newton expects them to keep moving higher.
I'm Debra Borchardt and this is your mid-day market update. Well a day after the Fed made their big decision kind of a yawner here today. All the indices are down but not terribly so, volume is light and joining me now is Mark Newton because he's got some good news, what he's seen in his charts from Greywolf. Mark, you said you're looking at the charts, you're trying to find some sign of correction but it really doesn't look like it's there.
No it's funny, every time you try short stocks you see these one-day surges and basically makes people have to cover their shorts and get long again. You know we never really got under the key levels to suggest that a bigger move to the downside was gonna come along and you know now you see recent strength in industrials and financials and so you see this sector rotation despite the fact if your stock is hitting high territory, the indices continue to remain afloat despite fewer and fewer stocks participating. So that's a bigger warning sign but for now you know the trends are still bullish, interest rates continue to move up and that's a little bit of a concern and it's still affecting utilities and the REITs and some of the interest rates sectors. China embarking on their own sorta tapering you know, and they didn't inject any money in their bank, and you see this...operates up at the highest level since September so it's interesting that you know, globally you're seeing at least a few signs of rates ticking up.
You did say that you expected that stocks had a good move probably for the first six months of 2014 then it might get a little dodgy after that. Is that true?
No, I think it's right because you haven't really seen the negatives be taken away from the market that we're basically been in place since May and June and a lot of that has to do with your stocks hitting new highs and you know this low amount of divergence that you see on a daily to weekly basis and those are still concerns. Sentiment right now has reached very optimistic levels and that's only going to continue now that the market seems to be more comfortable with the fact that if we taper slowly, it's not going to be detrimental, there is no dislocation and you know stocks have managed to rally even in the face of this tapering. So if anything investors I think are more enthusiastic and that's definitely a concern when you see you know these sentiment polls blow out to the highest levels you seen in the last few years. So my thinking is the market probably stays afloat until spring time, you might have a small dip and then a rally back to highs March-April time frame. Next season in terms of spring and summer should be a lot worse I think for stocks.