A shaky start to the day as sellers hit the market hard. The market nearly made it all the way back to positive territory. Volume was higher across the board, but was below average. The positive spin on the day is certainly buyers were willing to step up when it appeared we may be slipping into correction territory. Unfortunately, we had a shaky close. It would have been nice to close out at the highs and in positive territory. We certainly would have liked to see this market go out at the highs, but it wasn’t in the cards today. At the moment, this market still remains in a precarious position. The prudent move is to be cautious and obey your trade signals.

A caution flag here is certainly the major market averages below their 50 day moving averages. The NASDAQ was almost able to reclaim its 50 day, but failed. At this point, a move above the 50 day with volume would go a long way if we are to see new highs soon. For now, we certainly would expect this chop and slop to continue. It certainly is not ideal for us to continue to have a choppy market. It is what we have been dealt with.

Sentiment continues to favor those who are neutral. AAII respondents believe the market will not go anywhere over the next 6 months. Bulls remain in the mid-20s and Bears in the mid-30s. We cannot say we are surprised one bit given how this market has acted over the last few weeks. Now with earnings season upon us it will be interesting to see how stocks react. Friday we see earnings from C and JPM to kick off financials.

Earnings can be a tough time for many stocks. It is best you know when your holdings report. If you do not have cushion in a stock it is wise to cut the position prior to the company reporting. There is no way of knowing how the stock will react to earnings. Do not be a hero.

Have a great weekend! This is not a great market and it will likely stay like this until we see a confirmation in either direction. Stay the course and always cut those losses short.