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November 10, 2006

Stagnation

Today's session lacked any enthusiasm on the part of bulls and bears alike. Perhaps the mixed signals of the last two weeks has spurred timidity among all traders. Regardless, I have to admit I am quite disappointed in the ability of the bears to gain any downside traction. One would think all the "Sell" buttons on trading consoles across the nation had been deactivated. With the bulls on their heels after yesterday's reversal and the dollar confirming it has broken support, today was a golden opportunity to put some fear back into the souls of the longs. Instead, the ball was dropped and now bulls have the weekend to rest and get their heels dug in.

Metals pulled back modestly after yesterday's stellar gains, but some serious profit-taking was seen in miners which collectively fell about 3%. Given that miners have gone straight up for five weeks, a consolidation at this juncture is probably healthy, and the steep drop in volume from yesterday suggests a consolidation is exactly what we're witnessing.

With major indices going out on their highs, we bears will be wringing our hands over the weekend wondering if Monday brings a renewed buying spree. On the bright side... which is probably more of a dim light that a luminous one... the market didn't come roaring back to new highs. The gridlock that ensued today will be resolved early next week and will give us a clue as to what's in store for the remainder of November.

Disclosure: None

 

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