If you could call it action, we might agree but there really wasn’t much going on Wednesday and we expect similar lethargy on Thursday just before a holiday weekend. The market did trade with a positive bias on Wednesday and with really nothing moving too much either way. Techs seemed to have some demand, we have no idea why.
We are going to keep this brief again this evening. With the long holiday weekend just ahead, we thought we would sit back and take a breath. Maybe we can get back to some better trading next week.
The NASDAQ Comp did manage to push above its high from a couple of weeks ago which makes three for three of the major averages, with the Dow and the SP500 breaking out on Tuesday. This break has not been substantial or dramatic but it is still a break and we need to be careful with the way this market trades over the next week or so.
Our immediate reaction is that there is a chance for the market to have finished the correction wave during this week or on Thursday. The fact that the market had not sold off very much in the days since the highs of two weeks ago has been strong evidence that the market was not ready to go down. Today’s news that the hostages were going to be released from Iran eased oil prices and gave the stock market a boost but not that much of one.
We don’t want to read much into the trading this week due to the lack of interest indicated by the low volume. Instead we want to focus on the new week next week to see if April can still show us some downside. We have said that the first corrective wave could be very deep but we were hoping/thinking that the highs from a couple of weeks ago would be the limit. We didn’t heed our own advice on the subject of deep corrections. Now we need to see what the market has to say for itself.
Dow Industrials: 12,530.05 +19.75
QQQRS: 1.48 bid
QQQRT: 2.02 bid