Thursday, September 17, 2009

Profit Pause

Today was the day to take profits and/or jump onto the rally bandwagon. The major indices hugged the flatline most of the day, but early afternoon was the most opportune time to stake out a position. With most stocks down at that time - and there wasn't much time to do so - it was prime time for buyers, of whom there are plenty these days.

At some point, this market will turn back, but it wasn't today, and, as mentioned yesterday, is an event which is difficult, if not impossible, to predict.

Dow 9,783.92, -7.79 (0.08%)
NASDAQ 2,126.75, -6.40 (0.30%)
S&P 500 1,065.49, -3.27 (0.31%)
NYSE Composite 7,002.17, -35.97 (0.51%)

The downside close, however slight, ended a three-day winning streak for stocks, which have closed to the upside 8 of the previous 10 sessions. Decliners led advancing issues, 3492-2984, but new highs remained ahead of new lows by a widening margin, 517-95. Volume was once again strong.

NYSE Volume 1,512,904,000
NASDAQ Volume 2,641,632,000

Commodities also cooled off, with light crude for October delivery declining 4 cents, to $72.47. Gold gave back $6.70, to $1,013.50, while silver fell 17 cents to $17.27.

Initial jobless claims were lower for the most recent period, as were continuing claims. Building permits and new home starts showed a slight increase for August. The Philadelphia Fed reported an uptick in regional business activity index, to 14.1 in September, a substantial rise from the 4.2 figure recorded in August.

The market just shrugged off these positive developments as traders focused on rotating out of winners and losers, taking profits and planning their next moves.

With a day such as this setting the stage for Friday, markets could go any which way, though the impetus still rmains to the upside. It is understandable that the market pause like this before surging ahead to new ground as stocks have been on a strong tear for months. Booking profits at this juncture seems prudent, though there certainly appears to be more strong days just ahead.

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