It was an uneventful day of action, with the bulls unable to build on recent strength but the bears unable to really dig their claws into the market. Volume was slightly higher on the Nasdaq, which results in a technical distribution day, and we had fairly negative breadth, but it wasn't anything drastic.
Retailers were the biggest sore spot, with names like JCP, TGT, HD and KSS leading to the downside. Semiconductors continue their poor action, even though the group had some of the best earnings reports of the quarter. That is a major concern. Pharmaceuticals led mainly due to PFE. Gold miners finally are acting a bit better, even though the euro continues to rise and the dollar to weaken.
Technically, the S&P 500 is weakening right where you would expect it to, around the same levels that marked the highs in June. The good news is that the S&P 500 is still holding above the 200-day simple moving average at 1,114, and we aren't even close to testing the 1,100 level, which has been of significance recently.
It is still a fairly positive picture, but we lacked energy today, and that can easily become a more severe problem as we move into a period of seasonal weakness. This is prime vacation time for Wall Street, and many market players would be happy to raise cash and sit on the sidelines for a while.
After the close, PCLN posted a great earnings report and is trading sharply highly. We have jobs news coming up on Friday, so there will be some catalysts to consider. Right now, the bulls still have the edge, but they are going to need to keep the energy flowing, and that might be hard to do during a steamy and slow August.