It was another day of a strong opening turning into an ugly close. For the fourth day out of the last five days, markets opened strong or at least positive to reverse and trend lower for the rest of the day. The data point that was blamed was the Philly Fed manufacturing index. It came in below estimates and was the lowest reading since April 2003.
At the close, the Nasdaq fell .5%, the SP 500 and 600 both fell .4%, and the DJIA fell .3%. Unfortunately, today, leading stocks led to the downside with the IBD 100 falling .9%.
The good news about the losses was volume. It was lower on both the NYSE and the Nasdaq. The lower volume continues the pullbacks trend of low volume and volume below the 50 day volume average. The only day volume was above the 50 day volume average was a day when the Nasdaq reversed off the morning lows and closed near the highs of the day.
Breadth was negative on the NYSE by a 10-to-7 margin and negative on the Nasdaq by a 9-to-7 margin.
The low volume on this pullback on the Nasdaq is just what I want to see. It is happening on low volume during the Holiday season. If we were going up on lower volume, I would be worried about a selloff. But seeing volume shrink as we decline is just perfect. To me, that is a perfect Christmas gift from the market.
The technical damage to the indexes has been very minimal on this pullback and all indexes remain above their 50 daily moving averages. The Nasdaq 100 and the SP 600 are resting on that line but they are still holding so there is nothing to get worried about yet. We just need to be aware that they are at the line.
It seems to me, with the light volume, that most movers & shakers have started the Christmas vacation early. I don't blame them. I am sure it is cold where most of you live. That really has to suck. I got sunburned today and surfed without a rashguard. It was nice! But if I still lived in STL or NYC, I would be at home bundled up and spending time with family and friends. I hate cold weather more than I hate computer problems.
The year is almost over and there are only a few full sessions left before the end of the year so the market is sure to offer some very exciting longs. ONSM comes to mind. I had to pass on that one. Everyone already knows about MAMA. And another beautiful stock that I passed on 12/15 because it was only in its third day in the base is HTI. This is the kind of end-of-the-year stock moves that make Christmas an even more enjoyable time of the year.
Aloha and I will see you at Investors Paradise.
New Swing Longs For Everyone: AB
New Swing Longs For Me: ISLN ONT MEMY SEAC SLXA MVIS HAUP
Adding To Longs: HINT ADST IMMU ECMV
Longs Up Today (low vol non-IBD excluded): MAMA-228 PTT-105 APLX-28 HRT-30 BMA-34 HMSY-35 CPA-49 STEC-81 PSPT-31 CLEC-68 CCOI-39 IFOX SRSL CTCM GLDN IMKTA EVEP GRRF AMSF DLB ASCA IMA SMOD OMNI CMCSA JCG OTEX WTS NU HINT BMTI VEH OPTM ADST IMMU WRLS ECMV MDF CCBL OEH ISBC ATX PRCP LPHI
Stocks On Radar: TX CHDX FCFS TAST CRZ BUD CTC OBAS CLWT ORBC PRKR CRY DAR WHIT
Partial Profits/Losses: ASML SIGM BBI LINTA ANAD CAB IMGN IDEV ILC HEI MBLX DIVX
Complete Profits/Losses: RRC IONA FSLR EFUT THK IAAC
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