Sellers came out in force today to squash the 'Saddam rally'. In classic sell-the-news fashion, the market opened on its highs of the day and never looked back. What's worse is that the market closed on its lows and made bearish engulfing patterns in the indices and many individual stocks. The NASDAQ continues to show poor relative strength versus the S&P 500 and Dow. It wasn't even able to take out its December high on today's euphoric gap-up opening -- and it closed under its 50-day moving average again. It's also closing in on the trendline that began in May.
Looking at it another way, the NASDAQ is only 5 points above where it was in mid-September. So despite the trendline and moving average tests, the index is just going sideways. Whether it's building a top, or a base on which to build further gains remains to be seen. In the mean time, there continues to be a lot of tradable swings to be had.
