Wednesday, January 18, 2006

Back where we started

The market essentially finished the day about where it had opened. The SPX fell -0.4% while the Nasdaq declined -1.0%. Volume rose on both exchanges, making for the 2nd consecutive distribution day.

The market is still working off that overbought condition. I suspect it could bounce and then come back down again, which would offer a more attractive entry point. If the market is then unable to get back to new highs, it could indicate a more prolonged correction is in order.

But we need to take it one step at a time, and guage the price/volume action day-by-day. The put/call ratio hit the 1.0 level today for the fist time in quite a while. A rebuilding of bearish sentiment would help support any future rally attempt.

Gotta hop and listen to EBAY. Have a great night--

2 Comments:

At 2:44 PM, Blogger riyaz said...

Great blog. Thanks for keeping the readers like me updated. Its very helpful.

From what I read, do you believe market will tank a bit in next two weeks? I raised some cash this afternoon on fears of possbile war

 
At 3:48 PM, Blogger J. Kahn said...

I am not expecting a big decline. Possibly some further consolidation. I will look to use that sort of pullback to put some money to work.

 

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