A better than expected jobless claims figure did help ignite excitement in the early morning session. But this excitement did not last for very long as buyers simply went to the wayside as GDP revision hangs over the market. Volume ran lower throughout the day and ended about 10% lower across the board. Selling did accelerate into the close and the close suggests selling pressure may step up in the morning. At the very least, the action today was on light volume, but we’ll need to see support rush into the market to avoid further downside.
Tomorrow morning we’ll finally get the much anticipated GDP revisions and although economists expect the figure to be 1.4% it appears the market is expecting something sub 1.4%. We can let the stock market pundits debate over how slow the growth will be and while they are distracted we can pay attention to how the market reacts. If we get this market to turn higher with an explosion of volume it will be a tell the market is ready to perhaps make another run higher.
This summer has been filled with lots of action yet we have been unable to produce a sustainable trend. It isn’t a surprise as many bottoms do not occur unless it is August, September, October, or March. Major market bottoms tend to be in August, September, and October. It wouldn’t surprise us to see a meaningful bottom show up in the next few months. Let’s not forget this correction began back in late April and is now 4 months in length. Market corrections tend to last between 3-9 months and with this correction now 4 months in duration a bottom should not be far off. For this reason, we need to be prepared if this market turns.
Whatever this market ends up giving us we’ll be prepared, but highlights our emphasis on Cash is King.
