Economic data was on the lighter side today, but with $1 billion in POMO today the market looked to push higher. A slight hiccup in the first hour of trading gave way to steady buying into the lunch hour. Unfortunately, the highs were set at noon and the market rolled back over heading to the morning lows on the day. This market continues to prove it has a hard time hanging onto gains. The positive here is the Russell 2000 was able to lead the market higher today. Volume was higher across the board, but given where we finished it does not provide much conviction. Technically speaking today is day one of another attempt at a rally. Regardless if it was pretty or not we can now look for a confirmation day. Caution is still very much warranted and cash remains king.
We continue to see a market that is in the danger zone. The last two trading sessions we have seen a market unable to hang onto intraday gains. We can point to many different things, but the fact remains strength gives way to weakness. Until we can see this market hang onto gains and power through resistance levels we will remain very cautious on this market.
INTC reported earnings tonight and of course it beat earnings by one penny. Funny how a company can do that…There are more earnings reports to come with NFLX and EBAY Wednesday after the bell. GOOGL reports Thursday. Reaction to earnings news will tell the story not our opinion of earnings. Remember, the “best” is always at the top and earnings never foreshadow how prices will move going forward. I know it sounds good, but price rules all and not earnings.
An area to look for potential strength will be Monday and today’s highs. If we can punch through these highs there is a chance we can rally. There is no guarantee we hit new highs, but at least rally for a week or two. It is best to remain patient with this volatile tape.
