Politics and volatility | stockbee

10/14/2013

Politics and volatility

The intense drama in Washington is producing some big swings in the market. The big bounce in last 2 days was relief rally in hope of a deal and resolution. It also shows aggressive dip buyers.

Aggressive dip buying has been the key character of this market for last 12 to 14 months. Any small pullback is aggressively bought , however it does not necessarily lead to new highs. Such V shaped bounces have petered out near high in few weeks. But as long as dip buying works, there is no reason for traders to change their tactics.

The selling in recent days has affected many momentum stocks. Especially the biotech stocks have been hit hard. The bounce has only set hem up for further weakness.

At the same time new leaders are emerging and the Top ranked stocks by momentum show that. 

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