In spite of the rising anxiety that the market is overbought and due for a correction, investors continue to ride the quickest rally in U.S. stocks since the Great Depression. Wall Street announced its 3rd successive week of gains up over 20% in just 6 months from their S&P 500 going up to 6.8% within the year.
Investment strategist Paul Mendelson said he had never seen such a market at extreme levels that no matter the morning start, buyers come in. What investors see as small dips in the trend of stocks lower in the morning session, ending up higher by the afternoon for weeks now as a good buying reason.
A detectable anxiety level is in the market with trading volumes so low and the CBOE Volatility Index is up this week although there were stock gains. The index is typically linked to the S&P 500 and the VIX increase is stock market decrease.
The VIX up 4.7% ending at 16.43 is low but still higher compared in recent months indicating that investors see more share movements ahead. What pushes the rally is the money infused into riskier assets like stocks in 2010’s last quarter after the vowed low interest rates by U.S. Federal Reserve.
The New York Stocks Exchange traded 7.13 billion shares while trading was below 2010’s 8.47 billion daily forecast at NYSE Amex and Nasdaq on Friday.
Stocks fight to match 2010’s trading levels keeping within this week’s 7 billion range. Thursday had the 2nd lowest volume at 6.7 billion shares while Monday’s was the lowest, trading only 6.6 billion share signaling a tired market unless a higher volume is seen.
Monday, markets will be closed for Presidents’ Day.
On Friday, investors will get a feel of the economic growth status from 4th quarter 2010 GDP.
Housing related partial report that includes S&P Case-Shiller home prices is due on Tuesday, existing home sales by Wednesday and new home sales on Thursday.
Top retailers like Wal-Mart and Macy’s report are due next week. There were 71% companies in the S&P 500’s 413 firms that reported having exceeded earnings estimates.