It was sort of a ho hum day on Wall Street with not a lot of activity as stocks pretty much stayed in a fairly narrow range for most of the day. The muted action was mixed with techs showing a small decline while the industrials managed to eke out a small gain. Market internals reflected the apathetic trading activity with down volume slightly out pacing up volume on the NASDAQ by a 1.26 to 1 ratio. Additionally the NASDAQ spread between stocks declining and advancing was narrow at 1.32 to 1. The slight negative trade was also felt on the NYSE as 1.40 stocks declined for every one that advanced and down volume edged up volume by a 1.48 to 1 ratio. The S&P 500 which made a new high for the year on Friday couldn't deliver any follow through to start the week. However given it has advanced 10.19% from the recent lows we are not surprised by the pause trade here. Near term support for the S&P 500 below the market comes into play in the 1,140 to 1,135 region. We continue to expect stocks to back and fill a bit here then make another attempt at moving to new highs. The one thing to watch for here continues to be the ratio of up to down volume and decliners versus advancers. If we get a day where down volume out paces up volume by a wide margin (say 4 to 1) and during the same session decliners score a similar margin against advancers then and only then would we become more cautious.
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