The stock market’s rally yesterday came on much lower volume than the days where the market has declined recently. It shows that there was simply a lack of selling…rather than a nice influx of buying…that fueled the advance.
Our change from a positive stance to a neutral one on the bank stocks this past weekend was a timely one…as Moody’s cut the rating on several banks overnight. Like the Fitch downgrade, it seems to be pushing investors to focus on the developments of the past several months. Ones they’ve ignored in recent months due to the liquidity fueled rally in the stock market that has taken the broad indices higher in a straight line.
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