The bulls won again today. Did the action look tired? Momentum was lost after a good start. Market breadth was quite good, with about 3,400 advancers to 2,400 decliners, but given the magnitude of the positive consumer sentiment reading, housing news and the reappointment of Ben Bernanke, the action was relatively sedate. A few weeks ago, a trifecta like that would have generated a much stronger move.
The sedate response may be due in part to lower volume during one of the peak vacation weeks for Wall Street, but it is the price action that really matters, and it was less impressive for the second day in row.
There are still pockets of momentum to be found, but it is concentrated in secondary names and is less intense. The market action still is positive, but it is slowing down. The market may be due for a rest, and as we have seen many times recently, this market has been very quick to regain its vigor after a very brief rest. The big difference now is that the news flow is slowing and we are entering a seasonally weak time of the year. Whether that matters or not, we have yet to see, but there is some slowing, and we need to take note of it....
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