Tough Trading in a Wobbly Market

The Nasdaq Composite flashed its second distribution day, or higher-volume decline, Tuesday, falling 0.8%. The percentage decline wasn't all that bad considering that Nasdaq-100 bellwether Apple (AAPL) cratered 6.4% to $538.79. Volume totaled nearly 37 million shares, well above its average daily volume of around 21 million shares. Apple's recent rally took it close to its 200-day simple moving average (SMA) around $597, but this price level looks like a significant resistance for now. The intense selling in Apple Tuesday wasn't anything new. The stock has been under distribution since late September (in an Oct. 25 column, I asked "What's Wrong with Apple?")

When it comes to overall market health, institutional selling remains fairly well contained in the major averages -- which is a good sign for the bulls. There's only been one meaningful higher-volume decline in the S&P 500 since indices flashed a mild buy signal on Nov. 23. That said, the Nasdaq and S&P 500 are facing early resistance at their respective 50-day simple moving averages. They could be tough nuts to crack in the near-term, but if the market perceives progress in fiscal-cliff talks in coming days, this could bring more institutional money in from the sidelines....270 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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