Ready for a Rest
By Rev Shark
Street.com Contributor
5/24/2007 2:35 PM EDT
Maybe it is because we have a three-day weekend and the traditional kickoff of summer vacations is coming up that buyers are so reticent to dip a toe into this weak price action.
As I write, we are once again making a new low for the day and breadth continues to erode. We now are closing in on four declining stocks from every one that is advancing, but surprisingly, retail is the one sector that is actually up on the day.
There is going to be plenty of talk about what is causing this selloff. Some will say it's because of Greenspan's China comments yesterday; others will say it's because the better-than-expected housing numbers this morning and rising interest rates are going to make the Fed less market-friendly.
The truth is that the market was simply ready for a rest. The media can always find an explanation after the fact for any move in the market. People like to think there is some logic behind what is happening, but the reality is that much of what happens in the market is simply the ebbing and flowing of supply and demand.
We needed a rest after the run we had, and that is what is happening. Whether it will develop into something more than just a pause, we'll have to wait to see. The days around holidays like Memorial Day tend to be positive ones, so keep that in mind if you are thinking of being more aggressive on the downside.
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