Everyday the stock market seems to fight off the early declines and somehow makes its way to the positive side. Normally, I would say this is the sign of a true bull market, however, volume trends are so poor that we just cannot make that statement. Yesterday the stock market indexes declined sharply only to rally back into the close. Today is nearly a replay of yesterday except that the stock market indexes sold off sharply after the large gap higher open and then rallied during the second half of the trading day.
Many traders have simply thrown in the towel on the short side. Personally, I rarely sell short this market after the first hour of the day and only look for pullback setups to buy. The game of musical chairs continues nearly everyday. Today we did see a small change in character for the markets. The U.S. Dollar Index plummeted today and the stock market still sold off during the first half of the trading day. This is not a good sign for Bernanke and company as they may need to resort to another trick to prop the markets up. This is really the first day in quite a while that we have noticed this so it may really turn out to not be that important. I suppose every once in a while they must let the market decline along with the dollar so that everyone in the public’s eye won’t make the correlation.
