Looking to the indices, on Thursday, the Nasdaq lapped lower but immediately reversed and rallied sharply. However, it quickly found its high and sold off hard to make new intraday lows. It then bounced but sold off once again going into the close. This action has it closing poorly and stalling out below multiple tops/the top of its 1-month trading range.
The S&P also bounced around before closing near its lows. This action has it stalling out in the middle of its 1-month trading range.
Looking to the sectors, as one would expect, Thursday's "give back" of most of Wednesday's gains has many groups stalling. Internet stalled right below multiple tops. Retail remains stuck in a sideways high-level trading range. Biotech looks like it has the potential to roll back over. On the bright side, the HMOs still remain constructive. Even though telecom sold off hard, it still remains above Wednesday's breakout levels. Regional Air also ended lower, but so far, only appears to be setting up as a Trend Knockout (TKO).
So what do we do? I really hate to read too much in to a pre-holiday session. However, I don't think you can totally ignore what happened. The Nasdaq stalled right below multiple tops. The S&P stalled well short of its highs. And, in general, the sector action was very poor. At the least, for now, it appears that we could be stuck in a trading range. Therefore, I see no reason to get aggressive on either side of the market. Wait for the indices to tip their hand.
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