Markets may be throwing in the towel on the idea of a stock pullback. At least that's what it looks like. I know, what pullback? Between the Dow's historic intraday high on July 23rd to the intraday low on July 25th, there was only a drop of 1.3 percent...we can't even get a five percent pullback anymore!
Why not? First, stock volume in July has been light — not just seasonally light, but July 2013 volume is well below July 2012 volume. That means there is no avalanche of buying or selling interest. Second, with a roughly 5 percent gain in the S&P 500, it's clear that what selling occurred was met with new buyers standing in the wings.
Why? Perhaps most importantly, the trading community has become more comfortable with the Federal Reserve tapering its massive bond buying. There's a belief the economy can handle it, and the Fed has done a reasonably good job of assuring everyone the tapering will be very gradual.