Playing with No Heart

chessNwine Mon Nov 15, 2010 4:38pm EST 1 Comment

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MARKET WRAP UP 11/15/10

Stocks were mostly in the green today before finishing flat, but the overall performance was far from inspiring. Several names normally associated with momentum (e.g., IMAX, VECO) that ended the day higher failed to achieve so much as their average daily volume, highlighting the lack of heart shown by the bulls in reacting to last week’s precise test of the rising 20 day moving average on the S&P 500. If nothing else, today proved to be an excellent opportunity to sit back, relax, and let the dust settle before Mr. Market decides in which direction he would like to proceed. Although it is true that only price pays, when buying names at alleged levels of support it is crucial to be cognizant of the volume on individual issues in order to gauge conviction. Otherwise, how can we best define our risk in surmising whether or not support will hold?

To be sure, the bulls still hold the advantage, with price above the rising 20 and 50 day moving averages on the S&P at 1197. With that said, this is no time for buyers to become complacent.

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