Yesterday’s market ended up mixed with the Dow and S&P closing slightly higher while the Nasdaq closed slightly lower. But that doesn’t tell all the story. We actually had the biggest one day reversal since April 7. The market started off the day very strong, and then reversed just as powerfully on the downside.
On one hand I remain very concerned about the lack of bearishness according to well known sentiment indicators. On the other hand, as I mentioned yesterday, there is ample evidence that investors may be talking like bulls, but are being cautious and remain sitting on a lot of cash that needs to be put to work.
As of right now, the market looks like it’s going to open a little lower this morning (probably because of an SEC investigation of IBM). But I doubt that a one day reversal will be enough to kill the kind of upside momentum that we’ve seen in recent weeks. So what I’ll be watching for today is if buyers come in and buy the dips, or if we’re finally seeing the start of a well-needed correction.
Larry
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