Jobless claims rose unexpectedly to 484,000 for the weak much more than the 465,000 expected sending futures lower. In addition to the weak jobless Cisco’s weak outlook and missing revenues added to the pain to begin the day. Volume soared at the open as the NASDAQ opened down more than two percent as panic selling set, but it didn’t last long. Futures created an opportunity for short sellers and value players to jump into the market buying up shares. Stocks climbed higher for the rest of the day, but failed to gather enough momentum to close in positive territory. Volume ended up lower on the day even with the help of the morning selling suggesting the buyers weren’t in full force. The market remains on shaky ground and the lack of big volume support cash remains king.
Cisco’s two hundred and twenty five million share day was almost one hundred and fifty five million more shares than yesterday’s trading. Without Cisco’s volume the NASDAQ would have been witnessed to ultra light volume and highlighting the lack of power buyers brought to the table today. In last night’s commentary I noted we needed to see a powerful rebound, we go the rebound, but didn’t get the volume.
The market will certainly be looking ahead to the Retail Sales and CPI figures out at 8:30 am EST. Import prices today came in less than expected, but the market will be keen on whether or not consumer prices are hinting at possible deflation. Unfortunately, most do not see soaring wheat, cotton, coffee prices that will certainly be hitting consumers in the coming months. On top of the CPI and Retail Sales figures at 9:55 we’ll see a reading from the University of Michigan consumer sentiment survey. If jobless claims are an indication of how the consumer is feeling than we should see confidence waning.
A tragedy emerging here is we do have a few leaders looking good. The issue here is we had a few leaders get hit today a sign of a weakening market. Not too mention the NASDAQ, S&P 500, and Russell 2000 indexes are below their respective 50 day moving averages. One leader has gone onto form a double bottom base here, it has yet to breakout, but has formed the pattern. A cooperative market would set up the possibility of excellent gains from this stock. It is ultra-important to have the market cooperating to catch the monster gains.
They way this market is acting, it is acting like it is broken. Until this market can begin to find its footing cash will remain king for quite some time. Remember, always cut your losses!
Disclosure: Long PWER