Is This Market Running Out of Steam?

Low volume and a lack of consistent leadership led to another day of mixed
results. The financial sector took back almost all of Wednesday's gains. Had
it not been for strength in the technology sector, there would have been broad
losses. The NYSE again failed to trade over 1 billion shares, with just 898
million shares traded, while the Nasdaq crossed just 457 million shares.
Decliners were ahead of advancers on the Big Board by 1.5-to-1 while the Nasdaq
was a break-even. The S&P 500 failed to penetrate its immediate resistance at
1,220, continuing the reversal down that began in the last 90 minutes of trading
on Wednesday. Its next support is the 50-day moving average at 1,172. The longer
the index remains below a significant point of resistance, the more significant
the line becomes. Note that as it lingers, the stochastic's fast line (red) is
beginning to arch over not an encouraging sign for the bulls. Disappointing
earnings from JPMorgan Chase (NYSE: JPM ) before the opening yesterday led to a
rough day for the financial stocks. The Financial Select Sector SPDR (NYSE: XLF
) not only reversed from resistance at $13, but closed below its 50-day moving
average at $12.50. The financial sector has been a drag on the broad market for
months, and many analysts hoped that Q4 would start with strong earnings for
JPM. Instead it looks like more of the same for both the group and the market.
Despite Research In Motion's (NASDAQ: RIMM ) umpteenth "disruption in
service" and its subsequent fall from grace, the technology sector performed
well yesterday. Much of the gain was due to a run on Google (NASDAQ: GOOG ), up
over 6% in anticipation of a strong earnings report after the close. Google
reported $9.72 versus average estimates of $8.74.