Current market rally stalls on volume
A brokered deal in Washington on tax cuts and the unemployment extension helped boost futures in the morning. Stocks jumped at the open only to face selling pushing stocks to lows by mid day. Volume on the NYSE was lifted by Citigroup after the government unloaded its remaining shares of the company. Citigroup traded 3.26 billion shares accounting for the majority of the change in volume on the NYSE. However, on the NASDAQ volume jumped more than 18%. The market at the end of the day looked poised to push into the highs of the day before the 3 o’clock hour. Rumors on the street of more insider trading probes helped sellers dump stock on the market. By the end of the day stocks finished on the lows putting in a terrible stall day.
Today is not the end all be all, but more importantly you must be aware of your stocks and how they are acting. One must take profits and cut losses. However, you have to go stock by stock and sell appropriately. If your stock is giving you profit signals ignoring them will only have you wishing you would have sold earlier. With today’s action there are a few stocks that appear to be flashing sell signals and we’ll adhere to them.
Sentiment remains high, last week we saw the AAII Bulls jump to 49.66 and has yet to see sub-40% for quite some time. Coupling the reversal today with sentiment a shake out or a deeper correction may be our midst. If today was not a signal of what is to come we’ll certainly see the market reverse course and continue higher. However, if our market leaders which took a hit today; decide to fall apart we’ll certainly see this market push lower.
Before today, the market and leaders were looking decent. Today’s action certainly put a dent into our leaders and we would like to see the damage limited to today. Regardless of what happens always play great defense and that is to cut your losses short. We may experience further selling, but the importance should be placed on your portfolio of stocks.
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