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Millionaire Now! by Larry NusbaumThis blog is based on the organizational principles found in my new book, "Millionaire Now! - A Financial Toolbox with Seven Steps to Wealth". |
Fed Minutes Curb Session's Earlier Gains
After a 4-day holiday break the major averages opened the new year on a positive note, however stocks reversed course after the minutes of the Federal Reserve's last meeting were released. The major average ended mixed and little changed while volume totals were higher than Friday's light pre-holiday levels. Breadth was mixed, decliners led advancers by an 18-to-16 margin on the NYSE and by a 16-to-15 margin on the Nasdaq exchange.
PICTURED: The S&P 500 Index gave back its early gains and closed the session in negative territory, with volume swelling greatly from quiet pre-holiday levels. While the actual price decline was small, the action is considered to be a day of "churning" where many willing sellers offset the buying demand coming in. It therefore was a day where the market encountered plenty of distribution or selling pressure from large institutional investors.
The Networking Index ($NWX +1.44%) was among the day's big gainers while the tech sector was mixed, with losses for the Semiconductor ($SOX -0.61%) and Biotechnology ($BTK -0.19%) indexes and modest gains for the Software ($GSO +0.21%) and Internet ($DOT +0.36%) indexes. The financial group was positive, led by the Broker/Dealer Index ($XBD +1.46%) while the Bank Index ($BKX +0.31%) posted a smaller gain. The Healthcare ($HMO +0.08%) group ended only slightly higher. Meanwhile, commodity related areas were clearly the hardest hit as the Oil Services ($OSX -4.36%), Integrated Oil ($XOI -3.17%), and Gold & Silver ($XAU -3.73%) indexes ended the day with considerable losses.
Bottom Line from Dr. Brett: "We saw serious institutional selling once it became clear that the market could not break above the 1440 resistance in the ES. We bounced hard off the lows for the day, but it's hard to be bullish about a market in which one average (Dow) makes a high by itself and everything else fails to confirm. The rally is becoming increasingly selective--not usually a sign of continuation. I'm flat overnight; my leaning is to sell into morning strength below Wednesday's average price for an anticipated test of Wednesday's lows."
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- "Who Is Next?" By Dick Bove
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NOTE: Please click on the charts below to enlarge them if [read more]
NOTE: Please click on the charts below to enlarge them i [read more]
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