Down on Apathy

 | Oct 19, 2011 | 4:20 PM EDT
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Despite Apple's (AAPL) earnings miss and the Spanish debt downgrade overnight, the market started the day with mixed action. A strong report from Intel (INTC) helped to offset the negatives, and the bears were fearful of another "Europe Is Saved!" headline, but the bulls never gained traction and the market dripped steadily lower all afternoon.

The most notable aspect of the action today was the lack of energy. Breadth could have been worse, but the only major sector in positive territory was utilities. Banks reversed after a good start, and even a frisky INTC could not keep the semiconductors in positive territory. Oil, gold, steel, commodities and retail all acted poorly.

The action was more reflective of a lack of buying interest than aggressive selling. There wasn't a catalyst for the bulls to keep on pushing, especially as we test overhead resistance and don't have a particularly strong foundation to build for any further move.

Some might argue that it is healthy to have a lower-volume pullback. Consolidation and base building wouldn't hurt at all considering the one-way action last week, but this market has a tendency to keep trending. As long as the S&P 500 stays above 1175, which is the 50-day simple moving average, we should be fine. But if we dip back below that point, I'm going to be concerned.

I'm optimistic about upside into the end of the year; a pullback now helps to set that up, but days like today don't offer much in the way of new opportunities.

Have a good evening. I'll see you tomorrow.

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