Stocks pull back in late day trade for a 5th day of go nowhere

November 25, 2015 -

Dennis Slothower:

For a fifth consecutive day, stocks chopped around finishing mixed at the close but with a clear lack of commitment from traders as neither buyers nor sellers can dominate for more than a few hours at a time . . . .

Today's Markets


With too few players at the wheel the market has oscillated very little over the last five sessions, rising for a few hours and then giving it all back going mostly sideways. Thanksgiving Eve was no different as the market finished ahead of the holiday mostly flat.

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The Nasdaq climbed 13 points (+0.3%) to 5,116 and the Dow inched up by only a single points (much less than a tenth of a percent) to 17,813, while the S&P 500 edged down a fraction of a point (also way less than a tenth of a percent) to 2,089. The NYSE finished flat at +0.01% and the small cap Russell 2000 at +0.77% - playing catchup with the larger cap indexes which out-performed small caps earlier this month.

Overseas, the Asia-Pacific region moved mostly lower during trading on Wednesday as Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both finished the day down by 0.4 percent.

Meanwhile, the major European markets rebounded following the weakness seen yesterday. While the U.K.'s FTSE 100 Index advanced by 1 percent, the French CAC 40 Index surged up by 1.5 percent and the German DAX Index soared by 2.2 percent.

No Thanksgiving Day in Europe – they all must be at work and jealous of the U.S.

A Flat Week

We have been mentioning the “spinning top” pattern now for almost a solid week and today was a perfect example. For a change I refer you to the S&P 100 index (the largest 100 capitalized issues in the Standard & Poors):

The distinct flattening effect can be easily seen with the S&P 100 index. For this index there are clearly four spinning top patterns over the last five sessions. Normally when this persistence shows it is evidence of a trend reversal. But since the trend upward from mid-November was limited to only two nice rally days we may not see a sudden drop in prices ahead of the Thanksgiving holiday.

We may merely be seeing the lack of participation / intervention this week as powerful players take a week off.

On the other hand, the NYSE is showing a distinct reluctance to advance above a descending resistance line – which is also the upper line of a sideways developing triangle pattern:

Notice how yesterday’s trading and today’s trading were both limited by the upper resistance line of this triangle pattern, especially apparent in the late afternoon trading today.

One thing that this repeating pattern has taught me over the years is that eventually, perhaps on Black Friday in two days, the market will make a strong movement – usually in an opposite direction to the trend that was in place prior to this repeating pattern.

But I sense it may be different this week. With so few traders around on Friday, it will be an opportune time to intervene with little capital requirements on Friday. So, we may see a strong jump in prices on Friday – despite all the signs saying prices should reverse here.

With the Fed trying to prime the pump for a possible rate hike in December the banking cartel could easily make this play on Friday.

Employment Data Down
Durable Goods Up

Today we saw several key U.S. economic reports, including a Labor Department report showing that initial jobless claims fell by more than expected in the week ended November 21st.

The Labor Department said jobless claims fell to 260,000, a decrease of 12,000 from the previous week's revised level of 272,000. Economists had expected jobless claims to edge down to 270,000.

A separate report from the Commerce Department showed that new orders for manufactured durable goods increased by much more than expected in the month of October. Durable goods orders surged up by 3.0 percent in October after falling by a revised 0.8 percent in September. Economists had expected orders to increase by 1.5 percent.

Excluding a jump in orders for transportation equipment, durable goods orders rose by just 0.5 percent in October compared to the 0.1 percent dip seen in September.

The Commerce Department also released a report showing that new home sales rebounded strongly in October after pulling back sharply in the previous month. The report said new home sales jumped 10.7 percent to an annual rate of 495,000 in October after slumping 12.9 percent to a revised 447,000 in September.

While a third report from the Commerce Department showed that personal income rose in line with estimates in the month of October, personal spending increased less than expected.

The University of Michigan also released a report showing that consumer sentiment in November improved by less than previously estimated.

But – as to be expected - trading activity was subdued, as many traders were away from their desks ahead of the Thanksgiving Day holiday on Thursday.

Happy Thanksgiving

Have a safe and happy holiday tomorrow! Remember to share your gratitude for the blessings you have been given in life – there are so many this season that face trying struggles.

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