Stocks End Near Lows; Financials & Housing Stocks Lag

Monday, April 26, 2010
Market Commentary:

The major averages ended mixed to mostly lower after weakness emerged from the closely followed financial and housing sectors. Volume on Monday was reported lower compared to Friday’s totals on both major exchanges. Decliners led advancers by a small margin on both exchanges. Meanwhile, new 52-week highs easily trumped new 52-week lows. In addition, it was encouraging to see new lows fall to the single digits on both exchanges. There were 91 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the 80 issues that appeared on the prior session. A healthy crop of new leaders making new highs bodes well for any market rally.

Financials & Housing Stocks Lag:

The major averages ended near their intraday lows after several high profile financial and housing stocks suffered distribution. BlackRock, Inc. (BLK -8.56%) gapped down and hit a fresh multi month low on monstrous volume after reporting lackluster quarterly results. Goldman Sachs Group Inc. (GS -3.41%) got smacked on above average volume one day before several key personnel are slated to testify on Capital Hill regarding the ongoing SEC investigation. Meanwhile, housing stocks, another leading group in this 9-week rally, negatively reversed (opened higher but closed lower) on above average volume which suggests a pullback may be in their future.

Market Action- Confirmed Rally:

It is important to note that the major averages have been steadily rallying since early February and a pullback of some sort should be expected. However, until that pullback arrives, the market deserves the bullish benefit of the doubt. Trade accordingly.

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