By: Mark Hanna
Posted on: March 12, 2012 at 8:30 am
Last week was certainly among the most interesting of the year. A long awaited "pullback" in the larger cap indexes finally occurred although calling it that a bit generous. The S&P 500 did not even fall a full 3% from peak; the NASDAQ showed similar although a slightly larger drop just over 3%.
Meanwhile the Russell 2000 was the most interesting of the bunch; it had been undergoing an "under the surface" correction throughout February and then finally broke out of its monthly range of 810 – 830 late last month. Unlike the other indexes it actually fell down to (and through) its 50 day moving average before staging a dramatic three day rally in the latter part of last week.
This can be looked at, in one of two ways – (a) the correction already took place in February/early March "under the surface" or (b) the market has been led by fewer and fewer names, other than the snapback, 'oversold' rally late last week in the R2K. Depends where you sit of course.
Of course all this rally action comes on pathetic volume – Thursday's volume on some of the senior indexes were the lowest of the year. But in the end (especially in the new era of 2009-2012+) all that matters is price; it just remains befuddling how selloffs come on volume, and rallies on ether. For those who do follow the William O'Neill/IBD framework I will note multiple distribution days have come to fruition – I believe there have been three, and yes they can occur (and often occur) in upward trending markets. So that is another 'caution' signal – although anyone preaching caution on
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http://marketmontage.com/2012/03/12/was-that-it/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+marketmontage%2Fxyz+%28Market+Montage%29
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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