Stocks drift aimlessly throughout the day after gapping higher in the early morning session. Pending home sales disappointed month-over-month and year-over-year helped sellers push stocks lower. Dallas Fed released its manufacturing index showing slower growth than expected. However, there weren’t enough players willingly enough to swap stock at lower prices and we held the morning lows. It is going to be a stretch to pull out any significant moves outside of the struggling Social Media stocks. Given the move higher at the end of last week today’s move wasn’t all that bad. We continue to remain in an uptrend with a few leaders struggling and potential rotation into new leadership setting up. If this market wants to go higher we’ll need to see this new round of leadership lead with conviction.
The hype around the TWTR initial public offering is what you’d expect in a high profile offering. Who doesn’t have a twitter account? The stock set a new low today at 38.80 (Ignoring the offering price) and continues to digest its recent gains from the first day of trading. It’ll be interesting to see how this sets up over the next few weeks heading into year-end. Other social media stocks like YELP and FB aren’t enjoying the last few weeks of trading. Both stocks cleared below recent lows and are searching to set in a short-term bottom. These two were leaders for much of 2013 and it is somewhat revealing they are struggling now. LNKD is another leader struggling with its current action. The stock needs to clear above October highs to have a shot at new all-time highs. While we aren’t counting these stocks out they need to make an effort to rebound.
It was somewhat surprising to see volume jump on a Monday after an options expiry day. I am going to have a hard time calling this a true stall day with volume below average, but it is something to keep on the look out. Holiday trading will certainly be deceiving and can always trick as last’s year post-Thanksgiving half day follow-through. Anything is possible and why we must be diligent in our process by following price.
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