From CBS Marketwarth today:
"The advance-decline numbers are horrible every day," noted Roy M. Blumberg, portfolio manager at First Allied Securities. "When the market comes back, fewer and fewer stocks come back with it." Other players grumbled about the narrowness to the market's advance, as well as the sky-high level of bullish sentiment.
"You have the same bad combination of very poor underlying breadth and way too much optimism that you had at the market top in July," said Gregory Kuhn, money manager at Kuhn Asset Management Co. "If the market was going to broaden out, it would have done so by now.
"All of your leadership stocks are very extended in price above their most recent sideways basing areas," Kuhn added. "And now they're coming in.
Historically, this combination of poor breadth, high optimism, and extended prices gives you more than just a garden-variety pullback in the market."
Wednesday's trading volume was eerily quiet for the third day in a row. Some see this as a positive, citing the adage that says not to bet against a dull market. But others see low volume as a negative.
"To me, low volume is always bearish," said Blumberg. "Low-volume
rallies are bearish since no one really wants to buy. Low-volume declines mean you haven't really scared people. The ends of declines come on heavier volume."
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