The bulls got off to a good start last week following Monday’s advance which was led by Tech, the Financial stocks and, believe it or not, the small-caps. After a quick test to support, the bulls recovered early and ended the day with a win as the Russell 2000 led the way higher.
Perhaps the early test to support was an omen because the bears were out in force on Tuesday. Fresh worries over China’s pending “slowdown” pushed the market lower by 1% before the indexes reclaimed over half their losses. Although there was some dip buying, the first layers of support were scratched as the bears seemed to be waking up from a nap.
Wednesday’s action was like watching paint dry as the indexes traded in a tight range before ending the session mixed. The Nasdaq was the only index that finished higher as Wall Street seemed hesitant to place bets ahead of Thursday’s economic news.
Futures were weak Wednesday night and when we woke up for Thursday’s action we knew it was going to be an uphill battle for the bulls. China was back in the news, along with France and Germany, which reported weak manufacturing data ahead of the bell. Economic news here at home came in better-than-expected as jobless claims continue to move south and are at 4-year lows. The good news wasn’t enough to offset the bad as the indexes ended the session down 0.5%, on average.
The bears had a nice lead going into Friday and were working on the second layer of support an hour into the trading session before the bulls started buying at the lows. The buying lasted into the afternoon but it wasn’t enough as the bears won the week.
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