SENTIMENT JOURNAL: Indifference Sets In , Frederic Ruffy
biz.yahoo.com
Market Internals: Stocks traded mixed during this holiday-abbreviated week of trading. The Dow Jones Industrial Average (^DJI) rose two times and fell twice. The markets were closed on Monday in observation of the President's Day Holiday. When they reopened, stocks soared and the Dow added 132 points on Tuesday. Then, a two-day slide erased nearly all of those gains. But a rally on Friday helped push the industrial average above the 8,000 level and up 110 points for the week. Internals were mixed-positive when stocks rose and negative when they fell. Interestingly, the New York Stock Exchange [NYSE] New High-New Low index adequately reflects the current trading. With sixty stocks setting new 52-week highs on the NYSE and sixty stocks setting new lows, the index finished the week at zero.
The Nasdaq Composite Index ($COMPQ) rose thirty points or roughly 3% during the past four trading sessions. Semiconductor, software, and Internets stocks all moved higher. Market internals were mostly positive. Even on Thursday, when both the Dow and the Nasdaq moved lower, up volume was only modestly negative and advancing issues actually outpaced declining issues on the Nasdaq Stock Market. Overall, then, the Nasdaq held up relatively well during the latest week of trading. In addition, the composite index is now near the 1,350 level, and up 15 points for the year 2003. The Nasdaq is also fast approaching its 50-day moving average and major resistance at the 1,360 level.
Sentiment Data: The sentiment picture can safely be characterized as indifferent. In the latest week, investors have not displayed any extreme emotion-neither bullish nor bearish. The low volume and sideways trading might partially explain the indifference. The Dow is at roughly at the same levels today as it was one month ago and average daily volume on the NYSE in the past week was only 1.2 billion shares. Given the lack of volume and volatility, the sentiment data has not produced any type of readings that might give hints regarding the market's next move. Therefore, we can only watch, wait, and assume this period of quiet trading will give way to a period of increasing market volatility. Straddles, anyone?
For the second week in a row, chip stocks are among the best performers. Look for SOX to move up and test downward sloping trendline. Watch for test of major resistance at 300. |
