Stocks digested Tuesday’s move well, with minor gains in the S&P 500 (+0.11%) and losses (-0.05%) for the NASDAQ. After a quick punch upward the pattern one wants to see is if the market can consolidate those gains via time (going sideways) or price (falling back); the former is optimal for the bull case. Under the surface it was a strange day however as most of the leading sectors fell back or stalled while money flowed into beaten down or broken sectors – for example gold miners, coal, and steel. In economic news a positive employment data point from payroll processor ADP helped support stocks:
Private employers added 198,000 jobs to payrolls last month, the ADP National Employment Report showed, handily beating economists’ expectations for an increase of 170,000. There were solid gains in construction, where payrolls rose by 21,000.
First the indexes - as mentioned yesterday both the major indexes reclaimed their multi month ascending channels with yesterday’s spike.
Many resources/commodity sectors have been lagging of late - this is where today’s action was. Gold miners were especially interesting as they put in a reversal candlestick called a hammer on very large volume. We shall see if there is follow through in the coming days in this very beaten sector.
On the negative side, once hot 3D printing stocks have fallen out of favor of late by momentum players, for example 3D Systems (DDD).
Ebay (EBAY) has also been strangely weak of late; note today’s volume on this one – a break below $53 could cause some serious near term issues.