Posted on September 23, 2008 - by andrew

Market Recap - September 22nd, 2008

The markets suffered huge losses yesterday, but volume was way lower than Friday’s:

• NYSE: -3.3%
• S&P 500: -3.8%
• Dow: -3.3%
• NASDAQ: -4.2%

I generally don’t like to see such big losses when the market is attempting a rally. However, according to Investors Business Daily, a rally attempt isn’t killed until the low of the rally is undercut. Here are other reasons why yesterday’s losses weren’t so bad:

1. Quiet volume - not only was it lower than Friday’s levels, volume was below average for the first time in several sessions.
2. Leading stocks didn’t suffer heavy losses

Conclusion

I am still optimistic about the rally until the market gives me reason not to be. Here’s what to do going forward:

1. Watch for the rally confirmation to happen since today is Day 4 of the rally attempt.
2. Be very stringent on what stocks to buy from your watch list. I’ve seen a lot of potential buy candidates that are flawed or are too thinly traded.