Commentary

Stocks snapped a two-day losing streak in today’s trading session. However, before getting hopes get too high, this does not look like the beginning of a year-end Santa Claus rally, unless you are long Gold, which posted signs of a breakout, or Real Estate’s Home Construction Builders.

Top performance among sectors was found in Consumer Staples (XLP +1.13%), Financials (XLF +0.99%), Information Technology (VGT +0.98%) and Telecom (IYZ +0.92%). Sectors significantly lagging the market were Energy (XLE +0.10%) and Utilities (XLU -0.07%).

There were no major economic data reports today.

Performance Summary

*Trends: ST = short-term; MT = Intermediate-term; LT = long-term

Market Condition

Today’s market breadth was overwhelmingly positive but unfortunately most of the advancing issues traded on lower than average volume. Translated into plain English: the market internals are weak and the rally is not to be trusted. Market momentum continues to be bearish as key moving averages have been violated, especially among some of the heavier weighted market cap components of the SP-500. Even more important is the fact that the trend remains downward.

The bear trap which I predicted after last week’s rally still has a hold on many bulls. Be careful…

Daily Chart Technical Analysis

Volume Radar Alerts

  • Vol % = volume percentage greater than average volume
  • SIR = short interest ratio or days to cover

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