You could’ve slept the entire day today and not missed much as the indexes sleepwalked their way thru a groggy session. Judging by the volume across the indexes and various sectors, it appears traders might have done just that. In our view, and this is strictly just a “feeling” that we have, the market seems like it will have an easier time moving lower than it will moving higher in the short term. That’s not to say we’re not bullish, we just feel like the market might be a little tired.
Who could blame the market? When you’re young and you play all day and have fun you’re going to need a nap at some point, right? That’s the current state of the market right now. The year is off to a really fun start (if you’ve been bullish like we have anyway) so the market may just need a little nap to rest up. The positive behind today is that SPX managed to put in a higher high. The negative is that it also failed to break above yesterday’s high, which means the sell signal is still in tact.
Watching sectors like financials (XLF) and technology (XLK) will help determine when the market may be ready to resume its ascent. These two sectors have been the clear bull market leaders and both paced the market again today. And one last note, you may see reports tonight that the housing data that came out this morning caused the market to stall today. We would say any such claims are BS because the market actually made a move into the black before the end of the day. Again, this makes us believe the market is simply just tired technically and needs a breather.
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