Tuesday, January 11, 2011

Stocks Move Forward on POMO of $7.8 Billion

Like it or not, the Federal Reserve continues to pump fresh money into the hands of the Primary Dealers, keeping the markets propped up in a thoroughly unconventional manner. Monday's POMO of $7.79 billion Outright Coupon Purchase, was followed again today by a slightly larger Outright Coupon Purchase POMO of $7.802 billion.

While the Fed and the PDs do their thing t make America great (or line their own pockets with taxpayer dollars, as the case may be), stocks have just kind of languished around, levitating today just above the flat line.

Dow 11,671.88, +34.43 (0.30%)
NASDAQ 2,716.83, +9.03 (0.33%)
S&P 500 1,274.48, +4.73 (0.37%)
NYSE Composite 8,018.68, +52.59 (0.66%)
NASDAQ Volume 1,907,460,750
NYSE Volume 4,489,686,000

Meanwhile, New York City braces for another wicked snowstorm, scheduled to hit the city and other large metro areas overnight. Should the Big Apple receive another foot of snow that they're unable to deal with, the stock market - for the reason that traders may not be able to make it to lower Manhattan and the lack of a Wednesday POMO - might experience a little bit of a time out and stocks may drift lower.

They should drift lower no matter what happens, as the indices are nearing a five-month rally without a break, also unusual, but not in this environment.

Advancing issues dominated decliners, 4016-2457, volume was light and there were 226 new highs on the NASDAQ, to just 12 new lows. On the NYSE, the numbers were 237-8, in favor of new highs.

Oil caught another big bid today, gaining $1.86, to $91.11 on the front-end NYMEX contract. Gold rolled up a gain of $10.20, to $1,384.30, while silver rocketed 64 cents higher, to $29.50. Outside of the commodities space, there simply wasn't much action, as has been the case for most of the past six weeks, though with earnings starting to trickle out - Alcoa (AA) started out with an .02 beat of Street estimates yesterday after the bell - that should provide some excitement, though computers - those machines actually executing 70-80% of all trades - are notoriously unemotional.

Some day, something may change. In the meantime, it's not how one reacts to news and events, but how well prepared one is for all contingencies.

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