Volume and the VIX were the two biggest stories of the day. The Bond Market was closed due to Veterans Day, but it would have been just as well if the Stock Market was closed. According to Investor’s Business Daily volume was down almost 61% on the NYSE. Over on the NASDAQ the drop in volume wasn’t as drastic but was still down 23%. The VIX dropped nearly 10% on the day as Fear left the markets. Is the lack of volume in the markets to blame for the drop in VIX? We are still in sell mode, but today was day two of another attempted rally and a confirmation day would have us switch into buy or neutral mode.
It is hard to give much credence to a day where there was absolutely no volume. AAPL continues to struggle and while INTC appears to have volume drying up, but can we even count on today? DDD a winner as of late reversed hard on volume falling more than 8%. Not the type of action you want to see out of a leading stock. PHM and LEN are two top home builders and both stocks appear to be ready to drop through their 50 day moving average. Again, not the type of action you want to see out of leading stocks. Banks held up, but once again like INTC volume simply wasn’t there to gain much confidence in either direction.
Looking ahead tomorrow we’ll get a read from retail sales. It will be interesting to see if Sandy has had any impact on the retail sales yet. Producer prices will hit the market, along with business inventories, but will be overlooked by the meeting minutes from the latest FOMC meeting. We should see the market chew on that and step up the intraday volatility. It is interesting the VIX tumbled on the day prior to the release of the Federal Reserve meeting minutes. We’ll be in wait and see mode tomorrow allowing the market to make its move.
We remain in sell mode, but we’ll be on watch to switch into neutral/buy mode as the market dictates. Cut those losses short. Cash is king for right now.
