Today’s light volume session kicked off the week with the broader market moving to the downside. The light volume on the NASDAQ and NYSE simply indicates there was not a full scale assault on stocks by institutional investors. On the positive side of things, the S&P 500 was able to hang onto the 50 day as well as the 10 day moving average. These key moving averages should be watched over as we continue to push forward through time. Monday’s trading session was not all that bad, but this market still unable break free to the upside into new high territory.
Distribution count remains high with a count of six days on the NASDAQ and S&P 500. The light volume session today simply means the big institutional players in the market were not willing to sell stock heavily. A very good sign for a market with a high distribution day count such as this one. Key moving averages will be crucial to hang onto here. If we crash through and volume accompanies the move it will spell bad news for the market. However, at this point even with the weakness to start the week we are still in a position to see higher prices. Do not underestimate the market to do the most damage to the most amount of people!
This market still remains in a very large consolidation period. While we remain above the 50 day moving average on the S&P 500 and NASDAQ we simply cannot break into new high ground. This market is on the verge of breaking through, but buyers have yet to jump in and support the higher prices. At this juncture we still hold the risk of breaking down and seeing lower prices. It is important to have a solid risk management process in place to protect your portfolio to the downside.
All-in-all not a bad way to begin the week. We would have liked to see the market break into new high territory, but we will have to wait another day. Cut your losses short.
