By Lawrence G. McMillan
It just doesn’t seem that this market can put a rally together. There were two attempts to do so this morning, and both failed. Yet, when $SPX probed below 1180, a strong buy program arose. So there are buyers around, but the aren’t likely taking positions to hold, merely to trade.
The market is oversold, and today’s action isn’t alleviating any of that condition. Breadth remains negative, and the Arms Index is high (1.68). In addition, $VIX has been down all day, continuing its recent divergence from the bearish majority. Yet, the market hasn’t really responded to these factors, even though there are a couple of “90% down days” that should have provided bullish momentum.
Perhaps traders are reluctant to get involved when there is a holiday on Thursday, figuring that the Europeans – who do not observe this holiday – might play games and drive the market down. Also, the U.S. stock market is open for only a half day on Friday, so the same effect could exist, although our market would be closing at about the same time as Europe’s does on Friday...
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