About Shark Watch
Tuesday, August 12 - 4:26 PM
Unfortunately for the bulls, lower oil and a stronger dollar weren’t enough to overcome some profit-taking in recent movers and yet more bad news for the financial sector. Like we mentioned earlier, many of the stodgier consumer-related names that saw some encouraging breakouts over the past few days don’t typically gain much momentum, so it wasn’t too surprising to see investors unwilling to continue chasing many of those names higher.
The general lack of enthusiasm as the day wore on is evidenced in how volume progressed throughout the day. Although volume was on pace to be a bit heavier than it had averaged over the past five days, the pace cooled considerably as we headed towards the close. If you haven’t already, be sure to check out our volume charting tool we recently added.
Despite the fact that we pulled back today and the S&P 500 gave up its 50 day moving average, the indices continue to be in decent technical shape. The bulls will face a good test if we get more of a pullback here, and we’ll be watching to see the degree to which they are willing to buy dips. But like we said this morning, the real gut-check will come when commodities see a reflexive bounce.
Moreover, the fact that we are in a seasonally slow period only adds to the fact that the market seems to be overly sensitive to oil prices. This is still a very tricky market, and the continuing lack of leadership makes it difficult to really build any core positions. As such, we will continue to pick our spots where we can find them, but will also make sure we are keeping our time-frames very short.
Have a great evening and we will see you tomorrow.