Given that the market was a bit technically extended and the news flow has been mostly negative, a pullback today wasn't too surprising. Breadth was around 2-to-1 negative and Apple (AAPL) was a glaring weak spot. But what was most trouble was the lack of energy. The toughest markets to trade are those where there is a high level of indifference and that is what it felt like today.
The bulls have been encouraged lately by the market's inclination to ignore bad news but that only works as long as enthusiasm levels stay fairly high. With earnings season winding down and no real catalysts on the horizon, it is going to be tough to generate sustained upside momentum.
I don't want to be too negative, as this market seems to have a contrarian bent when it comes to delivering upside action, however, I'm concerned about the slow trading and lackluster volume. We need a higher level of energy or the trading is going to become more random and unstable.
We are holding up technically and there wasn't any rush for the exits, but when it is this slow, trading becomes much more challenging.
Have a good evening. I'll see you tomorrow.
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