By John Nyaradi
Stocks sprinted to the finish line in the last two hours after another volatile day.
In the Technology Sector, Oracle (NASDAQ:ORCL) dropped 11.7% after disappointing earnings and sales and the NASDAQ 100 (QQQ) dropped 1.4%.
The VIX (VXX), the CBOE “fear index,” continued to swoon with another drop of 7.7% which brought the index to 21.4, a multi-month low not seen since last August. As a harbinger of future price action, the VIX is pointing to lower volatility and higher stock prices ahead as fear drains from the market.
chart courtesy of www.stockcharts.com
In the chart above, we see that the VIX has broken into a bear market with a “sell” signal, triple bottom breakdown and below the red bearish resistance line which points to lower prices ahead.
Big news came from Europe where the LTRO, Long Term Refinancing Operation, garnered greater than expected interest with $641 Billion in 1%, 3 year loans to more than 500 bidders. Widely seen as a “backdoor bazooka” or “stealth QE” program, it now remains to be seen if this money will go into sovereign debt or the coffers of major European banks.
At home, existing home sales were up 4% from last month with 4.42 million versus last month’s 4.25 million, while the median price continued to decline another 3.5% year over year as the housing industry continues to struggle with foreclosures.
Today comes a wave of economic news with GDP reports, leading indicators, jobs and consumer sentiment.
With some help from Europe, Santa wants to pack his sleigh.
Disclosure: Wall Street Sector Selector actively trades a wide range of exchange traded funds (ETFs) and positions can change at any time.
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