Friday, October 23, 2009

State of the Market - 10/23/09

The "fun" (or should I say chop) continued on Wall Street, as following a bullish session yesterday along with very positive earnings news, the market fell flat on its face today. Pre-market futures faded pretty much the entire morning, and when the market opened flat, it put its highs in for the session. From there, it stairstepped its way lower, closing near the lows of the day. Volume looks to be lower on the S&P but possibly higher on the Nasdaq.

Looking back on the past week and a half, we have seen a potentially significant breakout attempt be met with no follow-through, poor reactions to good earnings, and eventually heavier volume selling (Thursday thru Wednesday). We've seen that heavier volume selling and poor earnings be met with buying and bounces off support (Thursday). We've seen that strong buying and good earnings be met with heavy selling (today). Anyone else out there besides me a bit confused on how to read this market right now? Costanza market it is, I guess.

This is the shorter "Friday" post so I will wrap up by saying I still think the possibility of a significant pullback is high but at the same time, everyone seems to know what numbers to watch for on the breakdown, so if we break those, will it be too obvious for the breakdown to really occur? We could be back in a position where you have to overthink things to try and figure out what happens next. Let's just say I am glad it's the weekend and I don't have to watch this stuff for a few days. Take care and enjoy the break.

1 comment:

Jason said...

Im seeing the market as being weak right now also, but to continue higher, it would be a good thing in my opinion for this market to sell off a bit more. But based on price action alone, and a bit of volume thrown into the mix, all one can say is that the market is weak right now. Some sideways action maybe on the horizon until end of next week.

keep up the good work on this blog