Challenging, volatile, news driven, choppy conditions continue to drive the market.
After failing to make new highs the market tanked for 3 consecutive days.
Yesterday it found some support at the 50 day moving average and today a sharp rally is ignited due to comments of the Mario Draghi, president of the European Central Bank.
Draghi says he will do everything in his power to mantain the Euro, sparking a powerful short covering rally which is now starting to fade.
Technically we are holding the 50 day MA and making a higher low, but due to the chop fest, this could hardly be called an uptrend.
The movement in individual stocks has been in most cases even more volatile and choppy. This type of market is a traders nightmare as there is no edge. Only very short term in and out trading could be mildly succesful in the news driven environment.
As for the Macro data, it has been mostly negative this week. Manufactoring indices have been coming out in negative territory, indicating economic contraction.
Even housing data, that had been generally better than expected as of late has started to rollover.
Today's data was mixed with Unemployment Claims dropping below 360K but Core Durable Goods dropped sharply and entered negative territory with a reading of -1.1%.
They also breached their 6 month moving average to the downside for the first time since July 2008.
This shows that US companies are probably slowing down their production.