Starting Fresh in 2013

In the S&P 500, we dipped below 1395 and ripped above 1415, all on Monday's news. Market thinness usually exaggerates news toward the end of the year. Seeing an upside follow through after a potential V bottom is normal. The bonds may be injured for quite some time. We are looking to see 145 broken with decent downside volume. However, the news did create pressure in an overbought condition. There were back to back trend days. This is usually noteworthy. The fiscal cliff provided the incentive. However, once the news baked into the pie, the ingredients for more rallies is absorbed. The FOMC Minutes provided insight into our market and the likelihood of whats to come. After taking into account the previous FOMC meeting was met without compromise, the new posturing stated the asset purchase program will end in 2013. This was surprising to many bond holders. When there is a change in the Fed, the overall mood of our future trading environment will likely follow.

Thursday's FOMC Minutes had a different feel than expected. The news release was more important and sweeping than the Fiscal cliff news. In my experience, placing close attention to the subtleties always seems to help become a greater trader. I always enjoy beginning a new trading year with a clean slate. It is very refreshing. My extensive 2013 forecast will be available in my advisory service soon.