Markets attempted to reclaim some gains Tuesday and it looked as if they would early, but market forces overcame the sugar high as benchmarks gradually fell of impressive lunch time highs. Gains were somewhat robust with the Nasdaq up better than 1.5%, but the indexes succumbed to the bears weight by the close, a common theme as of late. The S&P 500 gained .2% and the Nasdaq .3% and the Dow which we rarely follow finished underwater. Among the winning sectors Tuesday were the defensive utilities. Not much in the way to inspire bulls who are looking for risk back on plays. The S&P 500 reversed more than 20 handles from intraday highs which corresponded with almost precise 200 day SMA resistance. That long term secular line has been supportive for almost 3 years now, with some brief relapses underneath in June and November of 2012. The Nasdaq reversed 53 handles off its intraday high, as again the indexes fell precipitously into the close, very bearish behavior. In my opinion, I remain comfortably in cash and fell no need to rush back in until the S&P 500can recapture it 200 day SMA above 1910. From past experience I know no one catches the exact bottom, and I do not mind missing the first 1 or 2% of the resumed uptrend. Of course I am presuming that uptrend will regain its former mojo. That is far from a guarantee. The swiftness which some economically important sectors has fallen has me nervous and on the sidelines. Take a look at the steel sector which looked like a bull market was underway. NUE is lower 16 of the last 18 sessions and off 17% in less than a month. Not exactly “steely” action.
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