![]() We’ll just have to let the market show us where it is going. Volume is still a problem for the bulls and got even worse yesterday with a puny 876 million shares on the Big Board and 492 million shares traded on the Nasdaq. Just in the past two weeks, the S&P 500 has sliced through its 20-, 50- and 200-day moving averages, it has ploughed through an intermediate resistance line, and is now close to turning the intermediate-term chart to up from sideways. Treasury bonds and gold, the case for a pullback is strong.īut bad news is not being treated all that badly. And with the appearance of big money flowing to the safety of U.S. With the internal indicators at very overbought levels and the major indices hard against major resistance, it would appear that the rally is about to fail. The public doesn’t know what to do with its cash and the advisers are saying, “Buy now!” The theory is that both of these groups are usually wrong. This week, advisers moved up to 38.9% bulls versus 38.2% last week, while three weeks ago they were 32.6% bulls. The other sentiment study that I find helpful is the Investors Intelligence Advisors Sentiment report, which is also a contrarian indicator. This week, they are 30.39% bullish and 38.24% bearish. Last week, the subscribers to the survey were 40% bullish and 33.33% bearish. What do the sentiment indicators reveal? A quick glance at the numbers shows that the AAII Sentiment Survey has flipped for the fourth week. That high represents the very top of a trading range with a floor at around 9,800. So what is supporting the market at the highest levels since early June?Īt least one thing is clear, and that is that the Dow and its companions are just a hair below a resistance line that connects with the high of 10,736 made on Jan. The Energy Select Sector SPDR (NYSE: XLE) closed at $56.31 for a gain of 18 cents.ĭecember gold rose $3.40 to $1,199.30 an ounce, and the PHLX Gold/Silver Sector Index (NASDAQ: XAU) fell 11 cents to $173.88.ĭespite all of the negative talk of a slower economy, higher unemployment, and a Fed chief who speaks his mind, the market has been holding at the highs of the week. September delivery of crude oil fell 46 cents to $82.01 a barrel on concerns about the economy. The Nasdaq crossed 492 million shares with decliners there ahead by 2-to-1. The NYSE traded a dismal 876 million shares with decliners ahead of advancers by 1.35-to-1. And the European Central Bank left interest rates at 1%, as expected.Īt the close, the Dow Jones Industrial Average was off 5 points to 10,675, the S&P 500 dropped just over a point to 1,126, and the Nasdaq fell 11 points to 2,293. ![]() Investors rushed to Treasury bonds pushing down the yield of the 10-year note to 2.9%. ![]() That decision could signal that the Fed sees a slower recovery and darker skies ahead for the economy. Next week, the Fed chief will hold a meeting to consider whether to use cash the Fed receives from maturing holdings instead of allowing its portfolio to shrink. They remember his last meeting with Congress when he voiced concern over the uncertainties of the economy and the market subsequently tanked. So the optimism of early this week has turned to skepticism and even worse, as investors ponder what Federal Reserve Chairman Ben Bernanke might say next week. Adding to investors’ worries was a retail report that showed no better than mixed sales results. Continuing claims fell 34,000 from the prior week, but are still very high at 4.5 million. So stocks started off lower, but around noon turned and plodded higher for the afternoon, but never made it back to the plus side.īefore the opening, initial jobless claims for the week ended July 31, were reported to rise to a three-month high of 479,000 vesrsus an expected 455,000. Mixed economic data, including an unexpectedly high weekly initial jobless claims number, left investors concerned over today’s non-farm payrolls report. ![]()
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