The market feels weaker than I originally thought last week. We all know that it’s been 3 ½ years since the 2009 market bottom. What’s bothering me this morning is the feeble bounce we are seeing on the NASDAQ. At the 200 day moving average you would expect to get major support over the next few days. So far we haven’t seen much new demand here. Instead we are seeing a large number of prior leaders being dressed down each day. Last week I wrote about AAPL, GOOG and LULU. This week its ALXN and NSM’s turn. When the best merchandise in the market is being taken out, what chance does the rest of the market have?

I’m struggling to come up with potential catalysts that would get this market back on track without a full correction. The strength in homebuilders and mortgage industries due to the housing recovery is probably not enough to resume a broad market uptrend. Perhaps if Apple (AAPL) is able to do something incredible and resume its uptrend, this market may follow suit. Currently it seems like AAPL is in a topping process. I thought the same thing back in April and it was able to come out of it. But how many times can investors go back to the same well before it runs dry? Aside from AAPL, I can’t think of any other individual stocks that could potentially have a major positive impact on the market. There are also numerous mixed macro factors that make this kind of analysis more complex:

  • We are in the fourth quarter of the year (which is generally positive)
  • Election season will be over in a few weeks, and we will know who our leaders are
  • There is some positive economic data related to the housing recovery
  • The Fiscal Cliff is fast approaching


However, with everything factored in it looks we are going to go down further. As always, I defer to the charts. The charts never lie, and are always less complex than trying to make sense of the political and economic environment. Right now, the charts all look pretty poor.