A late afternoon rally lifted stocks into the close, but the selling throughout the day took a toll on the market ahead of Friday’s job report. The NASDAQ lead all major market averages lower as volume rose on the session. Another negative sign was the index moving below its 50 day moving average. The Dow Jones Industrial average lost 120 points, but not nearly the loss on the NASDAQ. However, the blue chip index has been weak as of late and a death cross is fast approaching. Volume was higher across the board as institutions took to the market to sell down stock. Not a good session and certainly a warning sign to market participants.
One negative item certainly was the move in FB today. When we see strong reversals like we saw with FB today certainly is not a good sign for things to come. Not to mention when you see volume well above average! AMZN too showed similar action with the stock beginning the day on the right foot only to see sellers gain the upper hand. Caution needs to be warranted.
Sentiment continues to favor the bear camp as the AAII survey continues to favor the bear camp. The neutral camp remains at elevated levels as the small investor remains confused. NAAIM exposure index ticked higher from 50% to 63% long exposure. We are not at extremes and until we see II bears move to historical highs then maybe we can entertain sentiment.
ZeroHedge has a few interesting charts. While we see this day in and day out with ZeroHedge, but this time these are somewhat interesting. We are not trying to predict the future. Nonetheless, these are entertaining charts:
It will be interesting to see how this all plays out.
Tomorrow’s job report will add fireworks to the morning. Maybe it will last a few hours, but at least there will be some entertainment in the morning. There are red flags here and it is best to obey your stops. Cut those losses short.
