It was without a doubt one of those lazy summer days. The usual low volume, choppy intraday action, and near unchanged close is always the ultimate tell. A day of this kind of action makes it kind of hard to analyze, as not much has changed since Friday.
The SP 600 led the way with a .3% gain, the Nasdaq and SP 500 were down .1%, and the Dow Jones Industrial Average fell .3%. As you can see, nothing changed.
Volume was lower on both the Nasdaq and the NYSE, indicating big boys were not interested in participating. Breadth was positive on the Nasdaq by a 8-to-7 margin and the advancers and decliners were even on the NYSE.
The big gains on Friday were digested quite well on Monday and that can only be taken as a bullish sign for the markets on a short-term basis. However, with the Nasdaq still leading to the downside in the overall sub-intermediate trend I am not going to get too excited over the markets just holding these gains.
We need more big boys buying, simply put, if we want to get this market going. The charts are rising in a wedging formation on all the indexes and most of the individual charts that have broken are now coming up to resistance as they rallied on lower volume. Without big boys stepping in and buying now I wouldn't doubt this market just rolls over. I hope I am wrong as I know a lot of people still long this market. But I just listen to the charts. I try not to ever have opinions.
The market is in a short-term uptrend, I want to remind you one more time. However, the bigger picture is full of distribution, broken charts, and downtrends. This is not the market to load up on longs. The intermediate trend is down and on the Nasdaq the long-term trend is down.
Remember, also, the NYSE leads at the end of a bull market. The big caps are the last to rollover. This happens after the leaders rollover. The Nasdaq leads (not lags) during real rallies. In March 2003, the Nasdaq led the NYSE. With the big-caps leading now, you know you are in not the right market for easy money. So as long as the NYSE and big caps lead and the Nasdaq lags this bad (the Nasdaq is very ugly) you should keep your portfolio in cash.
In one more week the FOMC will meet. I am sure the market will be held hostage till then. However, as you know, there can be some wild random volatility leading up to these events.
With all the uncertainties in the stock market and the world right now, I still say the safest and smartest play for any new trader is to stay 100% cash. Stay positive, patient, and keep the watchlist updated. This market will turn one day. I shall see you tomorrow at Investors Paradise.
New Swing Longs: LNCE--for more info on longs and shorts go to Investors Paradise.
New Swing Shorts: NONE
Longs Outperforming: OMNI-198 AKAM-148 HSR-49 IHS-60 CTCI-75 USEY-43 VLG-35 TRMA RNST IGT DJO HMSY BWP DGX SEIC BOT CXW FORR MGLN IDEV DLP GISX ZONS DUCK
Shorts Outperforming: NTE CRXL JOYG BPFH USG WSM HCBK AVID MEOH MAFB BTH ISCA BLK BBBY GTRC GYI PBE MAS IYT FRC GE WFSL PDCO ESIO C AME HTLD NCC RS CAT WTFC AF DSL CNI HMY FWLT CPF FDX VLTR MAR DDE CGX LHO SYNA RRGB CI AHG
Covering Shorts: CTCO NAFC HNR
Stocks On Radar Screen: BRN--might go long 100 shares UTK ALY ISYS TRMB SHPGY ESI DIGE BAX BTE BKD BUF CHINA
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