Friday, January 29, 2010 Market Commentary: Stocks ended the day, week, month and year lower as investors digested the latest round of tepid economic and earnings data. Volume totals have turned bearish in recent weeks as large institutions continue dumping stocks. Decliners continue to lead advancers as the correction intensifies. Timing The Correction: On Friday, January […]
Looking at the market, Monday marked Day 1 of a new rally attempt which means that as long as Monday’s lows are not breached, the earliest a possible follow-through day could emerge will be this Thursday. However, if Monday’s lows are taken out, then the day count will be reset and the chances for a steeper correction increase markedly. It is also important to see how the major averages react to their respective 50 DMA lines. Until they all close above that important level then there will be a lot of technical damage on the chart. So far, the market’s reaction has been tepid at best to the latest round of economic and earnings data. Remember that the recent series of distribution days coupled with the deleterious action in the major averages suggests large institutions are aggressively selling stocks. Disciplined investors will now wait for a new follow-through day to be produced before resuming any buying efforts. Until then, patience is key.