The NASDAQ avoided its 8th straight down days with a 3.5% gain on the day’s trading. Volume was well below average, but higher than Friday’s shortened session. Today’s gains came after hefty losses from Thanksgiving week as well as the week prior. There were a few nice moves in individual leaders names, but overall the market picture looks weak. This most likely be the start of a head fake to the upside heading into the close of November. Better known as window dressing, fund managers may reach to push performance. Day one of a new attempted rally today and without any conviction from institutional buyers this head fake most likely will fail.
Sentiment had taken a bearish tone last week with the number of Bulls dropping to 33% while the Bears jumped to 38% (AAII Sentiment Survey). Friday’s close saw some interesting Bull/Bear figures on FINVIZ’s main page at the close with the bears reaching 70% (later in the day it got to 100%). There was quite the negative tone in the market last week and was broken after today’s move to the upside. Sentiment is never an exact science, more of a discussion point than a true decision point. Stick with the trend despite these natural reactions we are experiencing now.
Two names stuck out today and we mentioned them early in the chat room. BWLD and PNRA both had solid days with PNRA breaking out today. Volume was solid for both names, but unfortunately there weren’t many stocks joining BWLD and PNRA today. Perhaps with time we can, but it is highly likely these two stocks will likely fail their recent moves. Growth stocks aren’t treated kindly when the market is in correction mode. Be quick to cut your losses!
The trend remains lower despite today’s reversal of fortune for the market. It appears the market may look to fill the gap produced on 11/21, which will coincide nicely with the 50 day moving average. A light volume rally will certainly signal the short side is the place to be. This market needs major accumulation to starve off the market from taking out the October lows. Be prudent and not a hero!
