The market cannot escape the Fiscal Cliff saga, but was dealt a negative blow with US retail sales slumping. Sales were the worse since 2008 and the market did not take too kindly to the news. Stocks were able to sneak out gains at the open. Case-Shiller home prices didn’t disappoint like retail sales. However, by 10 o’clock sellers were in control. Volume on the day easily outpaced Monday’s holiday shortened session. The NASDAQ is now below its 200 day and near dropping below its 50 day. There are only three days left in 2012 and things aren’t looking good for our uptrend to continue.
AMZN breakout failure is a big negative for this uptrend. Last week’s breakout for AMZN was looking solid, but within a week the stock is hit with heavy selling pressure. Weak retail sales and services suffering an outage are likely to blame. However, just looking at the price and volume action it is apparent something has gone wrong. In addition, KORS a leading stock came under heavy selling pressure. SSYS is another leading stock stumbling on the day while still holding up it comes at a time when the market itself is under pressure.
VIX has regained its footing from last Friday’s fall. There is certainly a lot of media driven fear with CNBC constantly blasting the Fiscal Cliff and displaying the countdown clock. We can all remember when Congressional leaders came out on 11/16 and proclaimed a deal was near. Here were nearing the first of January and we aren’t closer to a deal than we were on 11/16. At this point let’s head over the cliff and get a grand bargain deal done. Can we trust our leaders to set us on the right path?
For this uptrend to continue we’ll need to see buyers step up and support this market. Know your exits!
