Tuesday was a bullish day on Wall Street. Outside of the gold miners and some retail stocks, most of the market was trending higher. The S&P 500 finally broke out to new multi-year highs, which should alleviate concerns about a possible bearish double top pattern. All in all it was a nice day for the bulls. Yet I couldn't find anything worth adding to the newsletter tonight. All of the stocks that did look tempting had earnings coming up in just a couple of days and we don't like to hold over an earnings report.
Strong corporate earnings have been fueling the market's gains. Yet the story tomorrow may not be earnings. Instead the market will be focused on the Federal Reserve and its FOMC meeting. Actually the focus will probably be on the first-ever post-FOMC meeting press conference with Fed chairman Ben Bernanke and a room full of eager reporters. The opportunity for Ben to say the wrong thing and tank the markets is pretty big.
Thus I am a little reluctant to add new candidates to the newsletter tonight.
If you think about it, odds are probably pretty high that the U.S. market could see some volatility on Wednesday afternoon. Readers might want to consider some short-term puts on the major indices if you think stocks might see a sell-off after the press conference with Bernanke.