Where Art Thou Bulls?

Sorry bullish fans, but the bulls didn’t make it. Tuesday we all had hope that the Dow’s push past 13,000 would be able to sustain itself, however after the DJIA’s .41% drop yesterday, that simply was not the case.Many hoped as well that the NASDAQ 100 would push through the 3000 mark, especially with the likes of Apple (NASDAQ: AAPL) and its new iPad 3 release.  With the NASDAQ composite shrugging off .67% yesterday, the bulls will have to reach a little farther to make that one happen.The S&P 500 did not have the support either, as the index lost .47%, while the Russell 2000 lost a whopping 1.56%.

Index ETFs of course followed along, as the SPDR S&P 500 ETF (NYSEARCA:SPY) dropped .39%, the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) dropped .44%, the PowerShares QQQ Series 1 Trust ETF (NASDAQ:QQQ) lost .45%, and the ishares Russell 2000 Index ETF (NYSEARCA:IWM) lost 1.49%.

So why did the Dow die 13,000 deaths?  My guess, as mentioned in previous posts,  was that there was too much resistance coupled with lack of support and generally overbought prices.Although the Dow breaking 13,000 was a milestone in that it was the first time to break 13,000 since the onset of the Great Recession, a .2% break through the top was simply not enough to sustain these levels, at least for now. The NASDAQ also briefly broke the 3000 mark, its highest in 11 years, however this level was not sustainable either.

The likely bigger picture reason for yesterday’s sell off was investors’ reactions to Dr. Bernanke’s testimony to Congress.  Markets were likely disappointed in the fact that Dr. Bernanke did not outright suggest further government involvement in the economy such as a possible QE3.  Although he admitted that the unemployment rate improved, Dr. Ben did not predict that it would get much better within the year.  All in all, markets must have been expecting more help and didn’t get it, and yesterday’s half a percent drop was a likely reaction to Dr. Ben’s statements.

One would also think that yesterday's positive Chicago PMI and revised GDP reports would do the trick, but to no avail.  Although these reports did not push the bulls past 13,000, at least our economy is growing still.

Bottom Line:  Yesterday was a sell-off as we lost what little bullish momentum we had. The Dow failed to sustain itself above 13,000 while the NASDAQ 100 briefly broke 3000 (11 year old record), but could not sustain those numbers either. The bulls likely threw in the towel in the face of too much resistance and lack of support to break beyond and sustain those prices, while no confirmed help from the Fed likely did not help matters either. At the end of the day, the economy is still improving, however markets still have a long ways to go.  Where art thou bulls?

Disclaimer: Wall Street Sector Selector trades a wide variety of ETFs and positions can change at any time.