The action today was pretty much what you'd expect on a slow, hot Friday in August. Volume was extremely light, and we just drifted around and ended up closing on a slightly negative note.
Breadth was negative at the close by a score of about 2200 to 3450, and most major sectors were in the red. The worst action was in retailers, due to JCP and JWN, but others such as KSS and DDS didn't help either. Semiconductors continued their extremely poor action, and you sure wouldn't know that technology stocks posted some very good earnings reports over the last month.
There was a lot of talk today about a rather esoteric indicator called the Hindenburg Omen, which is flashing negative signals, but if you need a reason to be cautious, all you have to do is glance at the charts of the major indices. The big selloff this past Wednesday took us through important support at the 50-day simple moving average, and we haven't done anything in the last two days to repair the damage.
The Russell 2000 looks particularly poor, and some think it has a date with the July lows in the next week or two. This very light volume, negative seasonality and negative economic headlines are not a good combination. If the November election were closer I'd be more optimistic, but we have two and a half months to go before we can see some gridlock in Washington, and positive catalysts are unlikely to appear in the meanwhile.