We kicked off the first of two holiday-shortened weeks with a perfect example of just how frustrating this market has been over the past couple of months. Despite three days of disappointing action, decent technical conditions and indications for a positive start to the day, buyers failed to step up to the plate early in the day. As the action developed, the indices languished and traders showed no interest whatsoever in rooting around for any pockets of momentum. Moreover, the few stocks that showed so promise right after the bell simply rolled right back over.
However, news that Moody’s had placed AA under review for a possible downgrade sent the market to fresh intraday lows mid-day, and for the next 90 minutes or so, the indices moved sharply lower. But just as we dropped under the lows from 15th, buyers finally made an appearance, triggering a late spike that would allow the market to finish well off the worst levels of the session. These are the exact sort of whipsaws we’ve been seeing for months now that has made dealing with this market so difficult, as it’s impossible to think that stocks are going to behave in any sort of rational manner.
While we were able to hold above support levels, but today’s action was just a reminder of just why it’s not going to be easy for this market to make progress, no matter how favorable the seasonal factors may be. Day traders continue to be in hog heaven, but the action will only get trickier as volume begins to dry up even more. I continue to think that buying a $1.00 for about .90 or so via closed-ends like AOD make alot of sense here.
long AOD
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