It is quite clear the weakest index we have is the Dow Jones Industrial Average closing below 15,000. Earlier in the session the market was handed a slightly disappointing ISM manufacturing index reading. However, it wasn’t until Obama began speaking did sellers use his speech to begin selling stock. By noon time however the selling dried up enough to let the market left itself from the lows of the session. Unfortunately, we weren’t able recapture the mid-point of the day. Today was a day of distribution for the NASDAQ and it will be something we’ll keep an eye on over the next few days. We have had enough breakouts over the past few days we aren’t overly concerned with today’s action, but we’ll need to continue to be vigilant with our process. The uptrend was dealt a blow today, but did not knock us off our trend.
The bull versus bear picture changed very little week over week. We saw slight bump for bulls this week to 37% and a slight decrease in bears to 30% according to the AAII sentiment survey. Neither is at extremes and it is not something we are completely surprised about. Next week may be another story, but for now sentiment isn’t overly one way or another. NAAIM Investment Manager Survey saw managers shift away from being long with extremely bearish bets jumping a tad. The overall survey shows majority of managers are positioned long, but not extremely. Like the US government investor sentiment really isn’t heavily skewed one way or another and remains at a stalemate.
While Industrials and the S&P 500 pierced Monday’s lows the NASDAQ and Russell 2000 failed to do so. However, given the recent moves in leaders aside from a name like TSLA we do not have overwhelming evidence from a price perspective to back off this uptrend. Now, you may say fundamentally the debt ceiling deal and the shutdown should weigh on the market we simply do not trade this way. We find it terribly damaging to have any sort of opinion regarding the market. Stick with price.
We avoided selling out at the lows and continue to see buyers jump in supporting this market. For now, while today wasn’t something we’d ask for it wasn’t the end all be all for our ride on this uptrend. Price wins.
Make it a great weekend! Get out and do something great.
