A better than expected GDP revision helped boost traders’ morale as stocks found support at the morning lows. However, the party would not last for the entire day as sellers once again was able to limit the gains on the Dow and S&P 500. Small caps stocks and the NASDAQ Composite held up better, but still weren’t able to hang onto the morning’ gains. Volume fell across the board indicating institutions still have yet come back from vacation. It would have been nice to see volume come near average volume supporting the market. We need to see more from this market to see this market resume making new highs.
GDP revisions were nice to see as they were higher. However, now that we are including works of art into GDP does it really reflect the reality around us? A philosophical debate can rage on, but using a decision making process using “gut” feel and what you may or may not think is far too dangerous. Follow price action using a disciplined approach is the recipe for long-term success.
A quick look at sentiment shows us the NAAIM survey did turn bullish from last week. The average for the responds was 47% of those who were surveyed were long the market. Last week the survey hit a multi week low of 34.76%. Over at the AAII survey we see bulls jumping 4.6% to 33.5% and the number of bears dropping drastically by 12.1%! Not too bad to see that many bears cave. Perhaps they have finally given up?
Enjoy the last trading session of the summer. Drop the losses an