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Stocks Erase Early Losses As GDP Disappoints

|Includes: AAPL, DIA, IWM, PowerShares QQQ Trust ETF (QQQ), SPY

The big economic news story of the day was the announcement of GDP leaving weekly jobless claims on the back burner. Disappointing at a 3% reading GDP failed to inspire the US has been chugging along at a good clip. Jobless claims fell more than expected, but remains well below the -400,000 mark. An early morning jolt was met with sellers pushing the market to the lows of the session. The market hung out at the lows for quite some time before late day buying picked up. Buying volume picked up as the NASDAQ found support at its 10 day moving average. Volume slipped on the day avoiding another dreadful distribution day. With that said, we were able to grab a bullish day despite the amount of distribution days piled up on the S&P 500.

Ignoring distribution for a moment, the way Small Cap stocks having been acting is quite peculiar. The last two times they have tried to breakout gains have quickly evaporated. It appears as if the market doesn't have the appetite to support higher prices here. It certainly is something to look out for in the coming trading days.

The McClellan oscillator is quite oversold at this point in time and it does lend one to think any downside from here is limited in the very short term. Markets can always stay well overbought or oversold for long periods of time. However, short term conditions can evaporate very quickly. At today's lows the market appeared as if we were going to remain very weak. However, buyers were able to find footing and step up their market operations. It shows there might be some juice left in the tank.

Leading stocks continue to hang tough in this market. AAPL held up well today considering the run the stock has been on! Looking across the market itself many leaders are holding up okay and aren't screaming "look out behind you!!!" The real caution is coming from the S&P 500 whose distribution days have piled up quite a bit over the last few weeks. On the other hand, the NASDAQ only has 3 such days. If there is further selling in the NASDAQ on volume it will be our clue to steer clear of the market. For now, we are cautious and will operate as such.

Enjoy the weekend ahead! Next week we have a holiday shortened week, so get out and enjoy life a bit.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.