Stock Market Summary Wednesday June 13th 2012

Posted by Stephen Sutherland on Wed, Jun 13, 2012 @ 11:16 AM
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Yesterday's market action was positive.

The Nasdaq Composite gained 1.2% on below average volume, however the level of trade did increase from the previous day making it a mild institutional buying day. It was also good to see the US tech index find some support at 2800.

It was constructive to see the S&P 600 get back above its 200 day moving average. It was also good to see the chip sector following through.

Global materials, India and Russia all outperformed. Leading stocks acted well.

As we move through time, the brief drop below the 200 day that occurred last Friday is looking more and more like a shakeout. The market is also consolidating nicely at these levels and looks to me like its building a firm sideways base. This makes sense because we don't want to see a 'V' shaped recovery. Instead we like to see a bowl shaped recovery and this is what the market appears to be doing.

From this latest action, I think the recent two bearish reversals were both harmless. I also think the market reversed because it would have been too much too soon. Let's remember that when the market corrects, it needs time to mend and this correction is no different. It will start building the right side of its present base when it's good and ready and so it would not surprise me if we see the market moving sideways for a while before it starts heading back higher.


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Topics: Stock Market Summary