It was interesting to see the market have the ability to close in the green without the help of AAPL and PCLN. These market generals have been helping the NASDAQ to push higher. Coming off extreme oversold levels today’s bounce was quite unimpressive with the market unable to close near the highs of the session. The release of the Federal Reserve’s beige book did not help as it lacked any tantalizing news about the United States economy. Not quite the oomph you would like to see from a market trying to bounce from the most recent sell-off.
Volume was lower on the day, but that is to be expected after such a drastic uptick in volume from Tuesday’s market session. Institutions were certainly dumping stock yesterday, but weren’t eager enough to hope back into the market. AA kicked off the earnings season and tomorrow GOOG reports after the market close. The last few earnings reports have been kind to GOOG, but I wouldn’t be taking a risk betting on a positive earnings surprise.
Today’s market did a bit to remove the oversold conditions, but it didn’t clear a lot. The weakness today showed this market may see lower prices before these conditions are completely cleared. AAPL and PCLN do make up quite a bit of the NASDAQ. Toss in MSFT weakness and you may be spelling trouble for the NASDAQ. If these generals aren’t able to withstand selling pressure this market will have a very tough time gaining any sort of traction.
A positive here is the NASDAQ remains above its 50 day moving average. While this is a positive the market does feel like there are a lot of internal warning signals. We certainly could see this market continue to push into new highs from here. However, volume is now on the Sellers side and yesterday’s actions prove institutions want to dump stocks opposed to accumulate shares. The Big Wave Trading market model is in sell-mode and we are reacting accordingly.
