Market Beaten Back - Right On Schedule

In last week’s sentiment overview I mentioned some troubling signs were appearing on the horizon. For one, we were once again just below the 1400 level on the S&P 500 index.

But that this important technical junction coincided with wobbly results from indicators like the percentage of stocks above their short term moving average and the CBOE equity only put call ratio made me question the health of this rally.

Although I still think there is ample evidence of a significant long term market bottom, why watch hard won capital melt by riding the wave down when it is this obvious?

Today’s breadth was bad but not horrible. On the NYSE we had 2.5 stocks declining for every advancing. For the Nasdaq the numbers were slightly better but similar.

The big market tell tomorrow will be Apple’s (AAPL) earnings release. Will it power the rally onward or will it put the kibosh on an already faltering one? The stock has run up well in advance of the news but fell today by almost 5%.

Apple has pushed the market’s recovery from the March lows, going from $120 to almost $170. But a healthy market is powered by a wide range of stocks.

Comments

[sivere]

The problem is not in the stock market specifically. The real economy is still somewhat functioning. It is being impacted by high fuel prices and commodities. People still go to work, give bitrth, eat food, live in [lower valued] hosues, etc. Life goes on.

The problem is the $500+trillion derivatives bubble that may pop at any time. This will impact the real economy if farmers cannot get loans to keep running there farms if people cannot get loans to finance their homes, if producers of stuff that people need cannot finance the machines and supplies they need to make the stuff.

This is all the fault of the Fed and its policies of the last 20 years (at least). As the derivative bubble was inflated the Fed stood by, even encouraged it with glee. In fact it is the fault of congress who have the constitutional responsibility to administer and maintain a currency and system of credits. Therefor, we need to

TakBackTheFed.com

We need to do it NOW. Let's not sit around and wait fo the crash, open our wallets, and pay for it (not that what is in our wallets will necassarily be woth much). Let's take action now, and save our nation!

[steve west]

really... well then perhaps you can tell us what the market will do next week. Pretty easy to call it after the fact