The major stock indexes traded back and forth the unchanged level once again today, with modest losses going into the close run on higher volume, marking today yet another distribution day.
Officially, the Dow Industrials closed down a scant 0.03% on NYSE volume of 5.5 billion shares, while the NASDAQ fell 0.3% on 2.4 billion. The leadership profile remains weak, though remains positive for now, with 161 stocks making new highs versus 78 making new lows.
The short term momentum oscillators remain negative, non-confirming the bullish stance of the AlphaKing Trading Indicator. We have no new trades at this time.
The stock market continues its sideways churn after last week’s plunge, and we expect the red and green jostling volatility to swing back and forth over the next couple of days. On the news front we have the State of the Union speech, followed by Fed Chairman Bernanke’s reappointment vote in the senate.
China continues to lead stock markets around the world into a potential new bear phase, though today’s plunge over there leaves the Chinese stock indexes sitting smack on their 200 day moving averages, thus a bounce over the short term would be expected to land in the non-too-distant future. We expect our trend indicators to be in position to issue a sell signal later this week, though for now sitting tight is the way to go, as not every threat of a trend change turns into the real thing.
401K investors should have ½ of their portfolio invested in a stock index, or aggressive growth, mutual fund, with the other ½ remaining in a money market fund.
The Index portfolio is ½ invested in QQQQ with the other ½ remaining in cash.
Kevin Wilde, Chief Trading Strategist AlphaKing.com.
