The markets were quite boring today, even news European leaders were discussing a second bailout fund couldn’t spark much interest from institutions today. Volume ran lower across the board as institutional players continue to sit on the sidelines. As the Financial Times headlines crossed the afternoon wires the market did get a jolt pushing back to the highs of the session. Unfortunately, buyers didn’t rush to scoop up shares and ultimately saw the market head back down. The 200 day moving average continues to be quite a resistance point for the major indexes! Day 7 came and went without a follow-through day, we are still looking for this most recent rally to be confirmed.
If you ignored the big generals like AAPL, AMZN, PCLN, LULU and a few others this market doesn’t appear to be quite that bad. Of course we are lacking anything resembling institutional accumulation, but sometimes these guys are late to the party. Regardless, the lack of interest in these institutional quality growth names simply continues to reiterate the point institutions aren’t participating in this rally. For whatever reason, it doesn’t matter, without their support this market will find it difficult to push higher.
It is anyone’s guess where the market will head. Just recently the QQQs flashed a sell signal only to be negated by the move off the recent lows. It is a shame we didn’t see a flood of volume rush into this market showing signs of life. But, when we have so many macro and micro economic issues it is easy to see why we aren’t seeing the support necessary for a big market rally. Again, we may see it come soon, but for now we have yet to see real accumulation in this market.
The real solution for Europe and the United States is simply to run surpluses and pay down existing debt. Easier said than done? Perhaps, most politicians want to get re-elected and cutting spending ANYWERE is a death sentence to one’s hopes of re-elections. Until there are real solutions on the table I don’t see how Europe or the United States resolves their issues. Perhaps this will provide a cap on the market, but we trend follower know better than to let this cloud our decision making.
Onward and upward! Remember, the best risk management is cutting your losses short.
I want to see a stock or group of stocks with new technology or some form of new organization lead us out of this. There is too much junk floating up with the good stocks. The governments and central banks won’t let the toilet flush.
I completely agree with you. I said in my video tonight and in the chat room that if someone showed me the DJIA chart, the Nasdaq chart (seeing the RS line lagging the DJ by so much), and then showed me charts of AAPL AMZN BIDU WYNN PCLN LULU…I would say without any hesitation that this is a very bearish pattern developing and that stocks are going to probably crack wide open. However, in my long scans that looks for accumulation in price and volume there are tons of pretty setups and all the longs we have taken the past two plus weeks are working! Odd odd odd setup we have here. I’ll be nimble. I’ll be quick. I’ll turn on a dime sell and short if that is the play. I am actually short 3 of the stocks I just mentioned still. Very long but still have some shorts that are working.