(By Rich Bieglmeier) The week got off to a mixed start as the NASDAQ moved slightly into the plus column while the Dow and S&P were mildly red. In a way, it was a good day for the equity markets as Black-Friday sales were estimated to be down 1.8% from 2011. When bad news doesn't send stock spiraling, it is usually a sign the Wall Street intends on moving higher. Let's see how Cyber-Monday sales turn out before panicking over a slow start to the holiday shopping season. It's too early to pronounce the consumer dead.
iStock is watching to see if the indexes can barrel through resistance at 3,000ish for the NASDAQ, 13,200 for the Dow and 1,425 for the S&P 500. For that to happen, bulls must pick up the activity. Thanksgiving week volume was awfully light, but with a holiday in the middle of the week, there is a built in excuse. With traders back to full-time on Monday, there is no excuse for a lack of volume.
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Maybe, bulls were waiting to see how bears would play their hand; however, when stocks tried to move deep into negative territory, buyers stepped in and snapped stocks higher. It's another good sign when investors can reverse losses following a rally in a downtrend.
For us, the question is whether the market is just uncoiling from oversold conditions or the start of a new uptrend. iStock's momentum, leadership, and market type models are posting buy signals, yet. As of Monday's close, the readings are sideways, sell, and sideways, respectively. To turn all-out bullish, we want to see mo' and leadership go green.
Perhaps, today's Durable Goods Orders report can help our models get closer to bullish reading. Economists believe Orders fell by 0.8% for the month. Although the number of manufacturing reports has been limited, for the most part results have been close to on target in November. iStock expects today's announcement to keep the trend alive and be close to expectations.
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Finally, in our weekly sector review, which we will post a little later today, the number of bullish sectors outnumbers bearish sectors by a 4 to 1 margin. Some of the best looking industries are footwear, toys, autos and auto parts, in our opinion. On the downside, telecom continues to have an unhealthy appearance on its chart. For now, investors might do well to look elsewhere to put new money to work. Make sure you check back with us a little later today for the full list of bear and bull sectors, along with an idea from one of the hot industries.