After a very strong gap up, stocks reversed and slid all day long until the last hour where they were able to get a small bid before the closing bell.
When was all said and done, the Dow Jones Industrial Average fell a fractional .02%, the SP 500 fell .07%, the Nasdaq fell a bit more pronounced .35%, and the SP 600 led to the downside with a .36% decline.
Volume was mixed, with the Nasdaq having a slight uptick in volume and the NYSE having lower volume. The higher volume down day on the Nasdaq was yet another distribution day since the rally attempt tried to start 14 days ago. Breadth was positive on the NYSE by a 9-to-7 margin and negative on the Nasdaq by a 4-to-3 margin.
It was yet another day of gaps and reversals for the indexes. The past three days shows the obvious battles going on between the bulls and the bears. Neither one seems to be able to get an advantage in this market and it shows in the weekly scorecard. The Dow and the SP 500 rose .2% and .1% respectively, for the third week in a row. The Nasdaq continued to lag with a .4% loss for the week.
This past week seems to sum up the markets mood right now. Confused. The only thing that is not confusing is that this market is still in a downtrend on the intermediate term and in an uptrend on the very short term. Without all trends being in the same direction, it is best to sit back and watch the market action and see how this turns out.
Why don't we just buy stocks before the Fed meeting? Well, first off, that has been the wrong play the last two times not sure I would want to chance this being any different. And the most important thing is that we still have NOT had a follow-through day since the rally attempt started 14 days ago. This Monday will be day 15. Rallies can happen and work this late but they are very rare. Especially when the leading index (the Nasdaq) has its 50 dma so far under the 200 dma.
It is summer time on Wall Street and now we enter the first full week of August. This is normally the slowest month on Wall Street. It should be obvious it has been a slow summer already by observing the 50 day volume moving averages moving in a downtrend since June.
Now we must wait on the Fed to see what kind of move the market wants to make. We may not know what Ben is up to but since we know the trends that is all we need. Taking action after that should be simple if you have been disciplined and have created a plan of action for an uptrend or a downtrend.
Keep riding those winners, cut those losses, keep those watch list updated, and keep cash heavy. Stay positive and I will see you at Investors Paradise. Great luck out there.
New Swing Longs: CTCM MFA AVNC ZILG
Adding To Position: IDEV
New Swing Shorts: CBS SIGI ATPG GSF NC
**For more information and charts on longs and shorts, go to Investors Paradise.
Longs Outperforming: OMNI-194 USEY-65 GPIC-38 DA-32 TYL-28 BAM-38 CXW HMSY BWP SEIC DUCK GES HWAY DGX BOT FORR MA IDEV LMT DLP BMRN SYKE RMR CAMT
Shorts Outperforming: SWC APOL TZIX CRXL USG AMAT RES ZRAN HTLD BTH GTRC XNPT PBE MAS PII CXG RCNI POOL VO IYT SUPX PDCO ESIO AME BLK VXF VB WTI WERN CSX RS WTFC AF DSL CNI IFX X FWLT STLD XPRSA VLTR MAR LDSH NCI EXBD HYDL RRGB FDX IJT IJS AHG HSY SBL
Cover Shorts Completely: AVID ISCA BBBY SYNA NCC CI
Stocks On Radar Screen: WBD FILE MEH WEN RPFG
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