Stocks rallied again Tuesday and the only explanation was Fed Governor Lacker's reiteration of the central bank's refrain on low interest rates. Financials, industrials and tech led markets higher, while volume was still on the light side and breadth was positive.
Dave's Daily By Dave Fry, founder and publisher of ETF Digest and author of the best-selling book Create Your Own ETF Hedge Fund. March 23, 2010 UNCLE SUGAR AND A NEW STOCK BUBBLE You know things are overbought when there's a struggle to explain this advance. Still up on Yahoo/Finance at 4PM is: "Stocks Rally After Homes Sales Data Top Expectations". They only met expectations and only because of seasonal adjustments. The only explanation for today's action comes from Fed Governor Lacker who restated the Fed refrain--"interest rates would remain low for an extended period." And Janet Yellen echoed that stating "record low rates needed to rev up recovery". So that's the green light to party on! The headline for DJIA is 11K is within sight and that's the window dressing Main Street needs to see. Retail investors are still withdrawing money from stock funds and more interested in bonds. Since many believe they're always wrong a switch back to stocks at this time may be a confirmation. Nevertheless, financials, industrials and tech led markets higher Tuesday. Volume was still on the light side while breadth was positive. Continue to Major US Markets