Just when you thought it could turn ugly the market stages an intraday reversal and end near its highs. At this point not much surprises me in the market and today was no exception. We pulled back as many including myself had expected, but each time the market hit a low support found its way into the market. Thursday morning’s trading was quite orderly as we moved to the downside. At first it appeared the NASDAQ might be heading towards consecutive days of distribution. However, buyers began to step up to the plate and supported stocks leaving many with nice tails on the day’s action. While we are still cautious here, today’s action was quite positive.
In yesterday’s commentary I had pointed out that during the 2003 uptrend the market staged a few outside reversal days. Three outside reversal days occured during that uptrend and all say higher prices. Wednesday’s move is an indication of the skiddishness of the market participants. Any false move and sellers pound stocks only to see them rally back. It can be quite frustrating to many as these whipsaws can take their toll on many. Having a clear plan on how to enter and exit will cure many of these woes from whipsaws.
The market will await earnings from Mr. Softy (Microsoft) tomorrow morning. At last check earnings estimates show the number being down over 30% year over year. Not too optimistic, but it’ll be interesting to hear guidance from the company as it will show whether or not they expect PC sales to jump with the new windows 7. Microsoft is important because it can single handly move the NASDAQ in either direction. Friday’s market may be driven by the earnings of this “bellweather.”
Enjoy!
