The NASDAQ chart shows another test for supply as buyers stepped up throughout the day after the pre-opening sell-off. One of these days, the bulls are going to get caught. The candle for the NASDAQ Comp today is called a Northern Doji because of the Doji’s position at the top of the candle.  It is a sign of uncertainty which we have seen all of this week. On the weekly chart, I am seeing a Spinning Top Candle which also indicates uncertainty, or lack of conviction either up or down. The falling volume confirms the lack of control by either side. Internals were flat to negative for most of the indexes.

Money flowed into bonds early, but by the end of the day, the TLT closed at 33.90% of its daily range as fear subsided. The VIX shows a similar intraday pattern, but it only managed to close at 12.87% of its daily range. The TLT remains bullish on the weekly chart, but the VIX is still at the very low end of its multi-year range. There is little fear in this market which should give us pause about being too fully invested on the long side.

Of course, as there always is, there were pockets of strength and weakness in various industry groups.  Exploration and Production stocks continued their bounce after the sharp one day sell off on Tuesday. This group broke out in late March and has been dominant since. Even with the reversal to the upside after the sharp selloff, the group looks very toppy to me. I certainly would not be chasing any of the stocks in the group. The easy money has been made.

Read Full Report