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Category: Dr. Duke's Blog
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The old adage, "Count to ten before you respond", is what comes to mind with the current market. The market is bleeding off some of the excesses of the past few weeks. After record gains in October, we are grinding slowly sideways and slightly downward. SPX closed down seven dollars to $2075. RUT lost ten dollars to close at $1178. Volatility rose a bit with the VIX rising almost a full point to 16.1%. Trading volume fell off with 2.2 billion shares of the S&P 500 stocks trading today. Trading volume dropped 1% on the NYSE and declined 16% on NASDAQ.

No significant economic data were reported today.

RUT is trading roughly at the high hit after the retest of support in mid-September. RUT is a long ways from its recent high in June, around $1296. By contrast, SPX traded within twenty points of its June and July highs before this most recent pull back. The significant point is that the small caps are not following the blue chips higher. Could they be leading the market lower? I don't think they are forecasting a bearish trend. I think this market is held up by Fed QE and low interest rates, but held down by weak economic data and a global economic slowdown.

We may be stuck in a sideways range until the next Fed meeting in December.