Yesterday, the market staged a virtual repeat performance of the prior trading day (Monday). An early sell off was rebuffed, and the major indexes recovered their losses and managed to close around the flat line.
While home prices provided some good news, economic reality struck hard with the Consumer confidence index dropping more than expected. It fell to 46.6 in July, which was down from an unchanged reading of 49.3 in June. Economists had expected a drop to 48.0 in July.
It’s no secret that this decline was primarily caused by a worsening job market and, until that picture improves, confidence numbers will not rise markedly.
Right now, we seem to be stuck in a sideways trading range; however, the bulls have some reason to cheer as early sell offs do not show much staying power and rebounds materialize. Sooner or later, a breakout will occur, but we will have to wait and see if it’s to the upside or if this rally has hit a glass ceiling and prices are headed lower.