Consolidation Day

After two days of unprecedented gains, the markets were a bit worn out, and by Thursday, they traded in a more narrow range, ending mostly to the upside, with the notable exception of the NYSE Comp.

Overnight, the Fed released guidance that the US economy would slow in 2008, than during the day made overtures to the public that they would stand vigilant and flexible to confront a variety of concerns. With most of the economic news being mostly credit and mortgage-related and negative, investors mostly sat back, took some profits and continued to worry-waiting game.

News that mortgage delinquencies were actually on the rise calmed the pace of trade and that was magnified by a major fire at a vital oil pipeline serving the Midwest which prompted a five dollar spike in the price of crude early in the day. By the end of the day, however, oil only added 39 cents on the NY Merc, finishing the day at a more reasonable $91.01.

Dow 13,311.73 +22.28; NASDAQ 2,668.13 +5.22; S&P 500 1,469.72 +0.70; NYSE Composite 9,773.57 -17.48

Internally, decliners took back the advantage over advancing issues, 3466-2903, but new lows remained in control, 286-133. While the new lows have been declining over the past three days, few stocks are making new highs. This indicator is currently at even, with a slight bias to the downside. Unless markets improve even more in the next few trading days, the trend to the negative will remain in place.

It doesn't take a genius to understand the movement of the markets over the past few days. Stocks were oversold on a purely technical basis. November was a brutal month for stocks until the nearly 600-point recovery of Tuesday through Thursday. The chances for a continuation of the rally into the weekend remain slim.

Volume moderated, indicating the widely held wait-and-see attitude. With traders expectant of nothing but moderately bad to outright horrible economic news, it wouldn't take much to stoke the flames and ignite another rally, though the strength and breadth would be largely constrained.

Since we're in the midst of the holiday season, more attention will be focused on retailers. Considering the uphill fight they have ahead of them, prospects are mixed at best.

NYSE Volume 3,539,243,500
NASDAQ Volume 2,180,081,000