Forget the ECB failing to give the market what it wants, non-sterlized bond purchases it was BAC stealing the show. The stock dropped below the pivotal $5 mark signaling continued selling pressure on the stock. Homebuilder confidence inched higher and even coming in better than expected. The move in the index didn’t help out homebuilders, but a positive for the beaten up sector of the economy. Selling really picked up in the market in the final hour, but volume was well below average. A very negative day for the market, but without volume this market remains in no man’s land.
It is easy to say we are going to head lower from here. My gut certainly says we are about to get hit hard here and it won’t be pretty. The last time I figured this would be the case was on October the fourth! Precisely the reason you cannot let your emotions get in the way of your trading. Opinions do not matter and they are usually wrong. Stick to price and volume action rather than your opinions on where the market is about to head. You’ll save yourself plenty of time and money!
From an economic standpoint the entire world is a mess. China’s ghost cities, European debt, and the United States monetized debt. Strictly from a pure economic stand point the market should be pricing in Armageddon. Reality is a much different place than theory and why the second paragraph of this commentary is so important.
This week will be relatively light in trading volume as we approach the Christmas holiday. I can’t blame for many institutions to take a break from this market. Heck, can you? Many hedge funds and mutual funds are negative on the year and would be glad to see 2011 go far, far away. Walking away and giving up is not an option here. As long as you cut your losses you can always come back to reap the rewards of the market.
Cut your losses short!!
