Wednesday, August 27, 2008

mkt today

About Shark Watch

Wednesday, August 27 - 4:26 PM

Afternoon Comments

Although they finished off the high of the session, the averages were able to close the day with solid gains. Of course, the financial media is downright ecstatic that, not only did the market advance, but they also have a convenient excuse for the upward action: the better than expected durable goods report! Be that as it may, there’s no arguing to fact that thin trading environments lend themselves to movement in either direction, and it’s just plain dangerous to read too much into the action – especially when the volume on the NYSE was again the lightest we have seen all year.

That said, the bias was positive today, and that allowed traders to concentrate on select pockets of action. A number of individual stocks acted well today, giving opportunities to traders with appropriate time-frames. We mentioned a few of those names earlier in the day, but that doesn’t mean we can suddenly trust this action. Not only does the low volume not lend itself to interpretation, but the major indices hit overhead resistance right at the developing descending resistance trendlines. We’ll see how things develop from here, but we will continue to maintain a cautious stance while we wait for volume to come back into this market.

Have a great evening and we will see you tomorrow.

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