Free Newsletter: Stalking Stocks with the Shark - Poor Economic Reports Trigger Profit Taking - 7/31/08

Free Newsletter: Stalking Stocks with the Shark - Poor Economic Reports Trigger Profit Taking - 7/31/08

A weaker than expected Gross Domestic Product number and higher than expected unemployment claims started the market off on a sour note. The bulls made a good attempt at a bounce mid-day and even had lower crude oil prices to help but they faltered in the final hour of trading and we closed very poorly.

The problem for the market at this point is a lack of good leadership. Financial stocks have had a huge bounce and now have seemingly run out of gas. There is some strength in biotechnology stocks but other than that we just don’t have any sectors or groups right now that buyers feel they must own.

For much of the year oil and commodity related stocks provided a safe haven for those who wanted some long exposure but those groups have all broken down in recent weeks and have left us with nothing other than big bounces in badly beaten down financials.

Many are calling for a market bottom at this point and maybe they will finally get it right for a change. However even if they do there is little upside momentum to embrace right now. We need some strong stocks to lead that eventual cause a rally to broaden out. Without leadership we will likely be stuck in a trading range at best.

Make sure you stay very selective and don’t rush to put your capital at risk without making sure that the chart patterns justify it. It is very choppy out there and remains a difficult trading envrionement.

The Nasdaq edged lower today on a slight pick up on volume. It was a volatile day of action with the bulls closing poorly after an attempted bounce. Technology names were pressured with GOOG and AMZN leading to the downside. Technically, the index remains in its trading range, but resistance is lurking above.