Monday’s drubbing was followed by a lethargic low-volume rebound Tuesday, which was triggered by a Case-Shiller 20-City Home Price Index that had a lower-than-expected decline. But consumer sentiment was a disappointment falling to 62 where 64 was expected.
The market lost much of Monday’s volatility but regained some of the losses. The Dow Jones Industrial Average rose 32 points to 12,534, the S&P 500 closed at 1,320, up 6 points, and the Nasdaq was up 18 points to close at 2,854. The NYSE traded 711 million shares and the Nasdaq crossed 416 million. Advancers led decliners by 1.7-to-1 on the Big Board and by 1.3-to-1 on the Nasdaq.
Volatility is a key characteristic of the Dow Jones Industrial Average since the late-April top. The index broke the 200-day moving average briefly in early June, then bounced, and in late June, penetrated the 50-day moving average.
Despite Tuesday’s 32-point advance, the test of the 200-day may not be over. Sluggish volume and a lack of depth, as well as a heavy-duty sell signal from the stochastic, tell us that the bulls are under more pressure than the bears. (more)
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