Stumbling uptrend awaits Mid-term Elections, Federal Reserve, and the Unemployment picture
April highs proved to be too much for the market as sellers took to the market just shortly after the major indexes reached their April highs. NYSE volume run rate was higher throughout the day, but as the day came to a close. NASDAQ’s volume was lower throughout the day, but the outside reversal on the NASDAQ spun a negative tone on the day. The market did escape distribution as major market events: mid-term elections, Federal Reserve, and Unemployment events are set to be released. Our uptrend technically DID NOT post a stall day, but over the past few trading sessions the market certainly does appear to be getting tired. While we did escape a few red flags today the market does appear to be beginning to roll over.
Last year the market was able to overcome near double digit distribution days. After rallying for two months the market does appear to be showing a few more kinks in its armor. The NASDAQ has avoided piling up distribution the lack of thrust to the upside as of late is concerning. No matter what our opinion of the market our focus is on our individual holdings. A few leaders aren’t flashing FULL sell signals just yet, but it is a signal to make sure you take profits as your stock moves higher. Removing an entire position isn’t exactly a wise move, but as your stock moves higher taking profits on pieces of your position is a wise move.
The morning session got going with a fresh batch of economic data. Personal income and spending disappointed early in the morning and did pull down futures prior to the open. At 10am EST a better than expect ISM Manufacturing number did help push the market higher. Manufacturing has been a sore spot for over a decade with more than 6 million jobs having been lost. This loss makes up about 4% of the workforce; an uptick in activity is needed to recoup the losses in the sector. Even with the positive report sellers took to the market as April highs were approached. We would rather see acceleration into the highs rather than selling, but it highlights we may be turning a corner here.
Again, opinions mean very little and our focus remains on our stocks. If begin to sell-off on increased volume we’ll take defensive measures and get on stocks setting up as shorts. We are bumping against some historical prescedance, but although on shaky ground this market can still go higher. Stick with your stocks and always cut your losses.
