Disappointing economic news did not help the market in the early going, but sellers weren’t around to mount a defense. Steadily throughout the morning buyers pushed the market higher. European fears calmed as CDS spreads tightened. Volume slid on the day as institutions simply weren’t putting any money to work. Well below average volume has been quite pathetic on this rebound despite the extreme oversold conditions. The past two days do not instill confidence this market can go higher from here.
There were a few stocks pushing higher today like LNKD that can give you some hope this market can push higher. FIO is another, but the stock is real loosey goosey. It is quite possible that volume comes in later like we have seen in the past fooling market participants. Volume has been real pathetic and today’s volume highlighted the lack of involvement by institutions. Is there something wrong, perhaps but price will be our guide.
Sentiment figures have come down a bit week over week showing the recent decline has pushed out some weak bulls. AAII Bulls and Bears did a flip flop with Bulls finishing this week at 28% while the bears jumped to 41%. II survey remained in the bull camp, but this doesn’t come as a surprise. Perhaps this recent bounce has bulls jumping back aboard, but it is quite difficult to be overly excited over the recent rally.
The recent rally did take the extreme oversold conditions off the table, but we are still a wee bit oversold. It won’t take much for us to get back down to extremes. Today’s move marked day two of an attempted rally for this market. At this point, I can see it is quite pathetic. Sideways action would do this market some good and setup for a day 4-7 follow through day. Personally, the odds of a follow-through day feel quite slim. Anything is possible and we’ll be ready to go with whatever the market gives us!
Get out there and enjoy the weekend! Make it a great one.
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