Once again we have another day where the market does not make much progress. Volume was mixed with NYSE volume falling while Nasdaq volume jumped day-over-day. Mid-day sellers pushed stocks to their lows just after 10 am EDT. It appeared we were going to let go and head for our recent lows. It was nice to see buyers step in and lift stocks off the lows. We are still contending with earnings season, the Fed, and finally the election. This market could be waiting to clear the Fed and Election before making any move higher or lower. Patience will certainly be rewarded.

Bulls continue to remain well below the long term average in the AAII Survey. Only 24% of AAII respondents believe the market will be higher 6 months from now. 38% think the market will be lower. We even saw the NAAIM exposure index drop into the 60s. While not at an extreme low there is certainly a bearish tone across the market. There are risks for us to contend with over the next few weeks. We just cleared seasonality risk and now we just need to deal with earnings, the Fed, and finally the presidential election. At this point, earnings and the Fed look to be the largest unknown. At the moment, we still have downside risk and we are going to continue to respect our money management process.

MSFT reported earnings after the market close. The stock reacted positively and should gap to the upside pushing the market higher. Next Thursday we have a boat load of technology earnings including GOOGL and AAPL. AMZN is its own world and will report next Thursday. Continue to pay attention to earnings as they have the ability to produce solid gains.

While we prefer uptrends this type of market should produce some big winners if we move higher. We need consolidation periods to separate the men from the boys. Have a great weekend and we will see you back here next week.