August 21, 2008
One of those days in the market today, where you might have rather watched grass grow then the ticker tape. Nasdaq down and the S&P up, and neither by any great amount. What was the headlines? More worries about the financials, but let’s be honest, Wall Street is going to be worried about the financials probably until they go on a raging bull rally and eventually peak before coming down once again. So unless there is another “known” bank – (that means having hard evidence of the actual bank and the name itself), the anxiety that people are feeling is not conducive to trading in the markets.
Yes there are still many threats to the financials and banks in particular that could come to fruition, but none have done so yet, and until they do, you can’t predict who or what it is going to be the next bank that goes under.
As far as the technical picture is concerned, the markets are trapped in somewhat of a no-man’s land where neither the bulls nor bears have the upper hand. The current rally isn’t broken, but it isn’t soaring either. Bulls need to see some enthusiasm and a wave of volume to accompany any upward move.
Here’s the Nasdaq and S&P charts…