The major stock indexes suffered a down day today, with the red ink going into the close run on higher volume. Officially, the Dow industrials fell 0.5% on NYSE volume of 5.6 billion shares, while the NASDAQ dropped 0.5% on 2.0 billion. The leadership profile remains positive, with 424 stocks making new highs versus 72 making new lows.
The short term momentum oscillators remain negative for now, non-confirming the bullish stance of the AlphaKing Trading Indicator for the NASDAQ (while the Russell 2000 AK Trading Indicator remains negative.) We have no new trades at this time.
The bears heeded our warning that it was make or break time, with a modest pushback today. The reaction to the FED decision tomorrow should be quite telling as far as the run up to year-end looks. New highs for the indexes and the immediate bear case is dead, while a continuation of the pullback has the potential to put an end to the bear market sucker rally off the March lows. The technical elastic is getting stretched very thin, and something is likely to give in the non-too-distant future, with tomorrow, and the close on Friday extremely important as to what happens next.
401K investors should be invested in a money market fund.
Kevin Wilde, Chief Trading Strategist AlphaKing.com.
