Bulls Seem Complacent

The stock market finally sounded the retreat. Breadth was 2:1 negative on both the NASDAQ and NYSE while volume was moderate at 1.6b and 1.4b respectively. Small Caps and speculative plays were sold off much harder than the major averages would have you believe. This should not come as a surprise since the most profits to protect have been in those issues. Even the Biotechnology Index was not spared from aggressive sellers. All-in-all traders are selling winners in order to protect any positive performance that they have worked so hard to finally achieve in 2005.

Is this another one day wonder for the Bears or is this a harbinger of more selling to come. The likely scenario is for the dip buyers to step in sometime tomorrow in an attempt to do a little window dressing for month's end. Is it just us or do you envision a Trader standing near your window wearing a dress at the end of every month? ... never-mind.

If You Held a Taser to Our Head:
The concern that we have for the market is that complacency seems to be permeating. If we hear one more Bull describe the wished for pullback as a healthy event we're "gonna get sick"! Therefore we would not at all be surprised to see a little more fear and panic than is currently expected to hit the market late this week or early next week. As long as it does not breach important support levels the market will still be considered in an intermediate uptrend. However, we have not yet decided exactly what those levels are at this point.

Hope you traded well.

___________________________________________________
The analysis, opinions and/or forecasts expressed on the Kcap Trading Blog (“KTB”) are for informational purposes only and should not be relied upon in making investment decisions. By using this site you agree that Kleiner Capital Management, LLC (“KCAP”) and its principals are not liable for any action you take or any decision you make in reliance on any content. Please be aware that there is no commitment by KCAP to update the KTB. Furthermore, there may be inconsistent timing and follow up (if any) of posts.
None of the information on KTB is considered individualized investment advice and should not be construed as a recommendation or solicitation to purchase any securities. Reliance on information provided on KTB in no way establishes an advisor-client relationship. Investors are encouraged to seek the advice of a qualified investment professional prior to investing funds.
Clients of KCAP, as well as the firm’s principals and other employees, may be invested in securities discussed at KTB. However, any mention of said securities is not intended to influence market conditions for the security to the benefit of KCAP clients and/or principals and employees. KCAP is not affiliated with any advertisers on this site and does not endorse any of their content. For additional information and disclosures, please visit www.kleinercapital.com.
The information on KTB has been furnished from sources we consider to be reliable, but no guarantee is made with respect to accuracy.
___________________________

Click Here To E-mail Comments