The bears finally managed to produce a little downside, but it didn't come easily. Strength in Apple (AAPL) kept the Nasdaq and Nasdaq-100 close to even, while the other indices managed to finish well off their midday lows. Breadth was a slightly better than 2-to-1 negative but volume was very light and there was no rush for the exits. In fact, if you are looking for downside momentum, you will really need to dig to find any big volume declines.
The tendency of this market lately is to quickly regain its footing after a brief bout of minor selling. The bears have not been able to produce any meaningful downside follow-through since mid-December, and there is nothing in the action today to indicate that this market is undergoing a major shift.
The big temptation in a market like this is to keep looking for some sort of dramatic change in market character. The longer we go with the same sort of action, the greater the inclination to look for conditions to shift. You can miss out on a lot of good trading while waiting for the next shoe to drop and you have to consciously force yourself not to do that when there is nothing in the market action that is particularly negative.
We are still in an uptrend, and today's little hiccup did nothing to change that. In fact, this sort of action is what we need for the trend to continue higher. I'd like to see even more basing but buyers have been too impatient for that and continue to exhibit the same inclination after just a few hours of weakness.
Have a good evening. I'll see you tomorrow.
