A few noteworthy issues regarding the general market malaise:
1) Volume was on the light side — 1.1B on the Nazz, 1.5 on the NYSE;
2) Up/down volume was less than 2 to 1 negative; Same for the Advance/Decline line (which has been trending down for 4 weeks);
3) The Nasdaq gained 441 points from the August low (1750 – 2191) about 25%; So far, markets have given back about 101 points (on a closing basis — 2171 – 2070). That’s less than 25% retracement (at least so far);
4) On the Dow, we ran from 9,708 to 10,867 — about a 12% gain. So far, the give back (closing basis) is 349 points — about 30%.
The bottom line is that the 2004 rally stole some gains from 2005. We got ahead of ourselves last month, and we are now working off that excess bullishness.
