Forget today’s action for a moment, here are some high level points about this market:
• Volume lacking on the upside
• Market leaders continue to suffer losses
• Seasonality headwinds
• Death cross on major market indexes
Today’s market did see a bit of a buying spree this morning despite an increase more than expected out of the Producers Price Index. Buyers were anxious to get long stocks this morning, but institutions were not in the fray. Volume was running all morning long as the market tried to move above Tuesday’s high. Lower volume is a terrible sign for the market as the lack of intense buying will likely lead to sellers dominating once again. A late afternoon push the market off the lows of the session, but the move was lackluster and lacked any hint of institutional support. This market continues to act heavy and on the verge of heading back to last weeks lows.
Commentary has been quite difficult to write as it is hard to continuingly say BEWARE of this market. The short side is the right side (so is cash) and we continue to wait for shorts to properly setup. They are pretty darn close to hitting our short points, any day now. All the major market averages look terrible and will take some time to repair. Time is on our side, but patience here is very much a virtue. Shorts are working and so is cash.
Taking a look at TAN the Solar ETF it is no wonder why we beginning to see companies fold like ESLR. Alternative energy once touted as the next “bi g thing” looks quite dismal here. Perhaps in the future solar/wind can be the future, but for now the market believes they are not. Even FAN the Wind ETF looks just as bad TAN. Again, for now, this sector looks terrible and maybe in time the group could rebound anything is possible. Stay away.
Tomorrow we’ll get our readings from sentiment surveys. It will be interesting after the recent volatility how will the investor feel about the market. Looking at the market without opinion looks dismal. Stick with facts.
