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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
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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