Tuesday, November 29, 2011

A nowhere day for the stock market

The good news is that there was not a huge amount of profit-taking in the stock market today after the big gains on Monday. That is good news, sort of, but doesn't assure us that we won't see significant profit-taking in the days to come. The Dow was up nicely a few times during the day, but there was clearly a fair amount of "sell into any rally" sentiment to bring the market back down to earth. NASDAQ actually saw a modest decline on profit-taking in the hot technology names that are also hot candidates for short-sellers. In other words, there is a lot of hot money in the hands of traders and short-term speculators who did not interpret the gain on Monday as "happy days are here again" – or maybe they did, but in a negative sense.
 
I expect that the consolidation phase after Monday's gain will last at least a couple more days.

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