Stock Market Early Morning Insights – August 9, 2016

There was some slight selling pressure in the market yesterday and some of the NASDAQ stocks, but volume was light, and the indexes held up well.

The story of the day was oil which it dipped below $40 per barrel just a few days ago. Rumors of an OPEC agreement on limiting production produced strong buying in energy stocks and oil futures and crude light closed just above the $43 level. This morning it is only up .12%, but bullish oil traders are looking to add to their gains. This is another great example of how news that originates is a rumor drives markets.

Nobody knows if the rumor is true, but with market manipulation rampant, that’s all it takes to move the oil market and make the shorts scramble for safety. This is why risk control is the most important part of trading. Traders spend an inordinate amount of time looking for the perfect entry, but their focus should be on protecting their capital when they are wrong.

The NASDAQ composite opened higher, traded down slightly, but managed to close at 41.8% of its daily range on light volume. Most of the selling was absorbed. If the slight bit of selling were distribution, I would expect to see much higher volume. Internals were slightly negative, but essentially were flat.

As I mentioned earlier, Energy and Oil stocks were strong, and were joined by Solar and Commodity stocks. Exploration and Production, Pollution Control, Precious Metal Mining, Internet Media and Application Software groups dominated the Top 50 GIR. Biotech and Specialty Pharma stocks were among the weakest groups in the database. Semiconductor Devices took a day off to consolidate.

The trends remain up even though many commentators are looking for a pullback. The most negative analysts are looking for a correction, but I do not see any indicator of that yet. Since I started writing this, crude light futures have turned negative and are down over .65%. Once again, the rumor mill must be active on the direction of oil. Stock futures have also given up much of their gains.

The trends remain up for the major stock indexes, for now.

STOCK MARKET EARLY MORNING INSIGHTS

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