This market continues its wicked ways as morning selling gave way to afternoon support. Volume was higher on the NASDAQ yet fell on the NYSE. Sellers appeared to run out of steam mid-way through the trading session and bulls were waiting to push stocks higher. The Dow was the only index lucky enough to close in the green. Small caps were the worst performing group down 55bps on the day. At the lows today the stock market appeared it was in danger of rolling over. This market remains on shaky ground and caution is warranted.
Bulls remain absent in the AAII survey. Most are pointing to this as the reason we are going to continue to rally. Sounds great and typically when bulls are lacking like they are now stocks tend to rally. The S&P 500 and Dow remain above their 50 day and 200 day moving averages and this is a positive. Unfortunately, the NASDAQ remains both below the 50 day and 200 day. Small caps are holding onto dear life and it will need to see buyers come in. Yes, the argument regarding the lack of bulls as a reason to rally sounds good. However, price is what matters the most and we will continue to focus on what matters.
The last 30 minutes of trading were a bit disappointing as the intraday rally was quite impressive. While volume was lower on the NYSE, volume was higher on the NASDAQ and a strong close would have gone a long way for the tech heavy index. We still remain in a tricky market and it is wise to stay small and cut your losers quickly. Have a great weekend!
