The morning kicked off with stocks running higher. Consumer confidence figures were at levels not seen since 2007 and the market initially liked it. However, as the market wore on and more rumors regarding an Obama impeachment and more sanctions against Russia sellers took control. Volume was tremendous on the NASDAQ today well above its 50 day volume moving average; a sure sign of distribution. The Russell 2000 was able to close in the green, but it too reversed off its high and remains below its 200 day moving average. This market has now moved into very shaky ground at the moment and we are seeing distribution pile up. We are moving accordingly and it appears this uptrend may have seen its last highs for now.
Consumer confidence number was a nice change in pace to see consumers confident. However, will it come at a price? We are seeing breakouts fail and more of our stocks giving sell signals. If you are in market leaders your portfolio is one of the best indicators of the market direction. At the moment we are seeing a market churn and burn those who are late to the game. Not to mention we are seeing distribution at extremely high levels causing for concern this market will begin a new downtrend. Odds have now flipped to sellers and away from buyers. It is time to move in accordance to the market behavior.
Tomorrow will be an interesting day with the Federal Reserve policy announcement set to come tomorrow anything can happen. Small cap stocks have been beaten down, but the S&P 500 remains near its all-time high. The NASDAQ Composite index too sits off its multi-year high. If we see some follow-through selling it will confirm this uptrend is over and we have the downside to contend with. Many will try to guess the market direction seconds after the Fed announcement. We will simply let the dust settle and adhere to our process. We are moving accordingly to our plan and what the market is giving us.
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