Jobless claims slipping to 565,000 was an unexpected drop in claims providing a positive kick to the morning start. However, insitutional investors were not impressed as volume slumped at the start and throughout the remainder of the trading day. Stocks spent much of the day in lackluster action unable to sustain any trend. Thursday’s stock market action was not the type of action you would like to see after gaining support the day prior. Today’s action is indicative of what is to come and at this point it doesn’t look all that pretty.
Leading stocks were able to put in a decent day price action wise, but like the rest of the market their shares were not gobbled up in a hurry by any stretch of the immagination. Even more troubling is the lack of interest in leading stocks. It is quite troubling to see institutions simply stepping aside and ignore quality leadership.
In the Big Wave Trading chat room we are discussing today’s “nothing” day. It really was a nothing day because of the light volume coupled with the price action. Wednesday afternoon’s darling Alcoa was suppose to set a positive tone for the market yet it reversed hard on exceptionally high turnoever. Not the type of action you want to see from a stock who was suppose to have announced a “good” quarterly report.
Interestingly enough the number of new lows on both the NYSE and NASDAQ climed into double digits for the first time in awhile. Although the ratio of New Highs versus New Lows remains positive the tick higher in New Lows on day where stocks didn’t breakdown is somewhat telling of the weakness creeping into the market. Whether or not this is a tell tale sign of a market that is about to roll over remains to be seen but these types of readings aren’t very encouraging.
I refer back to “chop and slop.” There are plenty of opportunities to make money, this market simply changes how we approach the market. Taking smaller steps into the market and being quick to cut losses and take profits is a sure fire way to keep above water at this time. If we do see volume surging back into the market and into the leaders than it will be time to change the strategy. For now, we continue to see a chop and slop market churning others’ accounts into oblivion. Do not try and be a hero in this market or otherwise you risk being out of the game all together. Until we get a clear cut direction, we’ll continue with our strategy of being nimble.
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