Major averages fell on mixed volume with the NASDAQ showing a higher-volume churning or stalling day.
Federal Reserve Bank of San Francisco President John Williams said the Fed may reduce the level of quantitative easing as early as this summer. QE has been a market catalyst since 2009 so the perception is that a slowing of QE would be bearish for the markets. Of course, other variables could begin to weigh in more substantially should the economy gain traction, but this still remains to be seen.
Friday is options expiration day which usually results in higher volume.
In economic news, first-time jobless claims came in higher than expected, the Philadelphia Fed's manufacturing survey was much worse than expected, and housing starts missed expectations, though permits topped views. Negative economic news has been prevalent yet the uptrend continues as this keeps the QE spigots open.
Eagle Materials (EXP) had a base breakout/pocket pivot in Wednesday's trade after a strong earnings report. Earnings and sales are robust and accelerating, and while the stock looks good, keep in mind that its Relative Strength is 94 so in an open window market environment where leading stocks start to finally shine, you might want to focus on stocks with even higher relative strengths. That said, there is nothing wrong with buying a position in EXP then substituting EXP with a faster stock should the situation arise.
3-D stocks continued to come under pressure, but so far Stratasys (SSYS) has remained well above its recent breakout level and pocket pivot from this past Monday. Three-D Systems (DDD), is pulling back its 10-day moving average where we would expect to see the stock find some support. Should the stock continue lower on heavy volume and crash through this area of near-term support, it would clearly be a negative. Given that the stock gave early buy signals at lower prices, there is still some cushion whereas buying into Monday's cup base breakout would put an investor in the stock in a more compromised position. Meanwhile, many leading stocks have become somewhat extended, hence would be entitled to pullbacks, which should occur in constructive fashion if the stocks are to remain viable.