By ETF Stocks
Volume trends have ETF Stocks believing the stock market is set up to move higher. An Economics 101 lesson that everybody knows is that more buyers than sellers means prices are headed higher. That’s exactly what happened last week.
The number of shares traded on Thursday’s post-Bernanke downdraft was a shorter stack than Friday’s volume on a day of gains. The difference could be a sign that sellers are going to wait for higher prices to fill out sell tickets while bulls consider stocks cheap at the moment.
Additionally, the NASDAQ’s chart shows a stepping up pattern as the two most recent pivot lows were higher than previous lows. Typically, market chart watchers look for successive higher lows and higher highs to determine when a new uptrend takes flight.
That’s exactly what happened last week. Thursday’s NASDAQ turnaround low of 2,859.09 is higher than June 11th’s bottom of 2,809.73, which is higher than the June 1’s correction low of 2,747.48. That’s the walking up the stair look that normally means a new uptrend is taking hold.
Wall Street computer models will get plenty of economic reports that could have the buy programs continue their stepping. On Monday, New Home sales will be released, Tuesday Consumer Confidence, Wednesday Durable Goods Orders, Thursday Jobless Claims and revised GDP, and Friday wraps up the week with Personal Income and Outlays.
Oddly, the more off the mark to the downside there reports come in, the higher stocks are likely to climb as Ben Bernanke left the QE3 option on the table if the economy deteriorates enough. That’s comforting, no?
One other non-economic news report will have a big impact on the market, especially affecting health care and medical supplies stocks. By Thursday, The US Supreme Court will rule on Obamacare by Thursday, at the latest.
In ETF Stocks’ weekend sector review; it sure looks as if Wall Street is betting on the decision benefitting related industries as Medical Equipment and Medical Supply stocks have turned bullish. Reading the tea-leaves, traders are leaning towards the law, or at least the cornerstone individual mandate portion being struck down.
ETF investors who want to trade the Obamacare decision might think about iShares Dow Jones US Medical Devices (IHI) or the thinly, very thinly traded SPDR S&P Health Care Equipment (XHE). Otherwise, ETF Stocks see PowerShares QQQ (QQQ) as a more diversified way to profit is Wall Street keeps on stepping higher.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.