Stocks started the morning pretty flat, then accelerated after the opening, but soon turned tail and trended down for the rest of the day. There were no news catalyst for the reversal but the fact is that stocks did reverse.
At the close, the SP 600 was the shining star rising .4% but the Nasdaq, the DJIA, and the SP 500 reversed to close lower by .1%. The IBD 100 kept base with the broader market also decling by .1%. Not really a horrible day but the intraday action was disappointing.
Volume was lower on both exchanges, as it does appear Wall Street is starting that winter/Christmas vacation. The small changes in the index combined with volume under the 50 day volume average is the tell.
The market was not really that ugly but today's price action was a harbinger of a weak market. This was the third day out of the last four trading sessions that stocks started a rally only to turn tail and close at the session lows. They are doing this also not in one fell swoop at the end of the day. Rather the selling is slow and consistent throughout the day.
I am not sure if that is really that bearish as if it were we would be seeing much higher volume. However, these poor days are not that bad. I mean come on the DJIA hit an all-time high yesterday, the Nasdaq is still above the 50 dma, and the SP 600 bounced right off the 50 dma. That isn't really a bad market now is it.
If the weak intraday markets are a warning before the storm we will be ready just by knowing this information. If a breakdown occurs we will be able to recognize that we saw the warning signs and can act IMMEDIATELY to lock in gains, cut losses, and keep cash heavy. However, until this trend actually turns down and the indexes breakdown, it is just a warning sign and NOTHING else. Look at stocks like MAMA and NAVI the past week. Is that a sign the market is doing poor? I don't think so.
If my large list of longs start showing clear downtrends, then I will get bearish. Right now, every single stock I am long is in an uptrend. There is not one stock I am long that is not in an uptrend. So I am not going to jump the gun and get bearish on this market.
The uptrend does look tired but we are in the Christmas trading zone where stocks like to rally on low volume. However, if stocks fall on low volume, to me, that will be more bullish. Like I keep saying. If we rally now on low volume we set ourselves up for a higher volume selloff. If we pullback on low volume we set ourselves up for a high volume breakout to the upside. This is just how it works normally. Does it mean it will happen that way? Once again...how the hell do I know?
I still remain in the choppiness camp as there is some major disconnect with sentiment surveys, put/call ratios, and VIX readings. My longs say more upside to come. The kind of longs on my scan say we are almost done. My final decision always last with the stock. Is it moving up or down. That is all that matters. I only want to be long stocks moving up and short stocks moving down. That is as simple as I can put it.
Aloha and I will see you at Investors Paradise.
New Swing Longs: JSDA RTSX ONSM Exxx
Adding To Longs: INO BMTI
Stocks On Radar Screen: GMKT THRM ATRS GSOL BCH PKTR MIDD RVBD CLWT JBLU HTI MSO DENN TGS TRP GHDX BUD KOF GETI; Food & Beverage stocks and Utility stocks in general.
Stocks Up On The Day (low vol non-IBD excluded): STEC-81 AOB-105 IHS-101 IGLD-56 CHINA-65 FTEK-43 PCCC-36 DECK-25 IAAC-71 INWK-56 AOI-36 DIVX-29 TTEC-62 LNET-26 TYL-51 ICE-46 IIVI-30 APLX-25 PSPT-31 SEIC-27 MA-96 SOFO-114 MOS-25 KNOL-165 NAVI-28 GVP-60 PTT-96 LWAY-29 NHWK GIFI SMOD AMOT ININ CTCM COH HEI SKX NITE RBN EVEP CNH RKT CACB LFL IMKTA SQM MVSN CMT BMC NSTC CVLT MAIL TSRA INAP BLUD OTEX AMSF TMO TRBN BMTI ACHN OSIR VPFG VEH MFG OPTM CTDC PFWD INO OEH BITI IFOX LYTS MCRS NEXC CCBL IGT CTEC GMRK BOBJ HAS MFRI PCBK TTG PRCP
Partial Profits/Losses: WSH JST HRT MAMA IIG
Complete Profits/Losses: SPRT MEMY
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