Stocks Falter, But Fed Policy Favors Bull Market

Stocks spent the past week in the wash cycle, as bears finally cleaned up to the tune of a loss of 1.5% in the Dow Jones Industrial Average , a loss of 1.9% in the S&P 500, 2.6% in the Nasdaq Composite Index and 1% in the Russell 2000. They rebounded on Thursday and Friday with more of a whimper than a bang, as breadth and volume were a lot weaker than the headline gains in the Dow would lead you to believe. The rally looked more like a response to the extreme short-term oversold market condition than the initiation of a new advance. Buying was more intense on Thursday and Friday on the New York Stock Exchange than anywhere else. But overall volume was actually down by almost a third from Wednesday, the bulls were much more focused on large-cap stocks than the small-caps, and techs were shunned – which is the opposite of what typically occurs in a "risk-on" trading climate. Technology stocks were up a touch as a group, but individually a lot of major stocks in this sector looked absolutely awful. One of the worst of the bunch was fallen angel F5 Networks, Inc. (Nasdaq: FFIV ), which broke below its 200-day average for the first time since the bull cycle began in March 2009. Read More...