We kicked off the week with an oversold market that was due for a little relief, but the action today barely qualified. We did close higher than the opening lows, and the Nasdaq in particular managed a little green, so you can call it an oversold bounce, but volume was extremely light once again, and we didn't exactly manage a great leap forward. Breadth was positive, and there was net buying, but it sure wasn't very lively.
What we are seeing is a very high level of disinterest. The market hasn't been too friendly lately, so it's a good time to enjoy the end of summer before school starts. Earnings season is over, and the only news flow is macroeconomics, which hasn't been very impressive lately. I'm already hearing negative comments about existing-home sales and revised second-quarter GDP, which are due out next week.
It has always been my contention that bad markets don't scare you out, they wear you out. If we don't have more lively action soon, market players will be inclined to move to the sidelines just because they have grown disgusted and weary. They aren't frightened or even that pessimistic, but when we have this light-volume drift lower, it takes a toll.
We had a mediocre bounce at best, and there were few signs of dip-buying or bottom-fishing. There were a few things in the green, but it is very tough to trust that we will have any sort of sustained upside follow-through. The trend needs to be respected, and it is still down.......
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