The market has been stuck in a very tight trading range for a month. Yesterday's NYSE volume of just over a billion shares makes me nervous. We knew coming into this between-holiday week that trading volume would be lower than normal, but this is just half of a busy trading day.
More Quotes from Ken Tower:
I'm left with the sense that this is a trading-range market, not a larger decline. The major averages are now coming down to their late August lows, which are presumably the low end of this trading range. There wasn't any real sign of a reversal yesterday, but support is nearby and downside leadership is poor.Ken Tower
Even though the news has been dismal this week, investors have to keep an eye on the July Lows. As long as the Dow and the SP stay above those lows, you have to be ready for some good news. If you take those lows out, the market will sink lower.
Ken Tower
Today we should get some idea of just how strong the bears are. Yesterday's lack of reaction implies traders don't think the bears have much of a game here.
Ken Tower
At this moment the Fed would like to stop raising rates. But if the employment cost index shows too much wage inflation, then the inflation hawks will make it hard for them to stop.
Ken Tower
Only 10 New York Stock Exchange stocks made new lows yesterday, so it's clear that there is a great deal of underlying market strength. Industrials remain the clear winner, as they reached another new high yesterday. Financials had a huge rally and also closed at a new high. Leadership will eventually shift back to tech, energy and basic materials, but we're not there yet.
Ken Tower
You have to be a little nervous about this number. This is going to do nothing but make us focus more on next week's Fed meeting as investors keep searching about inflation clues.
Ken Tower
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