The major averages got smacked on Thursday sending the benchmark S&P 500 Index to its longest losing streak in seven weeks, dragged lower by the ailing financial sector and the latest round of tepid economic data. Volume totals were reported higher on the NYSE and the Nasdaq exchange compared to Wednesday’s levels which marked the latest distribution day and suggests large institutions are aggressively selling stocks. Decliners trumped advancers on the NYSE and on the Nasdaq exchange. There were only 2 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, barely higher than the 1 issue that appeared on the prior session. Leadership has evaporated, and without a healthy crop of leaders hitting new highs it is hard for the major averages to sustain a rally. New 52-week highs outnumbered new 52-week lows on the NYSE but trailed by a large margin on the Nasdaq exchange.
Lackluster Economic Data Rocks The Market:
Before Thursday’s opening bell, two separate government reports showed unemployment claims fell from a two-month high while durable-goods orders excluding transportation rose slightly. The Labor Department said weekly jobless claims (i.e. the number of Americans applying for jobless benefits) slid by -19,000 to 457,000 in the week ended June 19. Elsewhere, the Commerce Department said durable goods, goods meant to last at least three years, excluding autos and aircraft, rose in May for the third time since February 2010. However, the overall reading was down -1.1%. The fact that the major averages sold off on the news suggests investors were not pleased with the results. After the close, both Oracle (ORCL) and Research In Motion (RIMM) posted their latest quarterly results which sent ORCL higher and RIMM lower in after hours trade.
Market Action- Rally Under Pressure:
Technically, the fact that both the Dow Jones Industrial Average and the S&P 500 Index continue falling after closing below their respective 200-day moving average (DMA) lines earlier this week suggests the market may retest its recent lows. Looking forward, the 50 DMA line may act as stubborn resistance and this month’s lows should act as support. Since the June 15, 2010 follow-through day (FTD), this column has steadily noted the importance of remaining very selective and disciplined because all of the major averages are still trading below their downward sloping 50-day moving average (DMA) lines. This week’s sell-off simply confirms that view. Trade accordingly.
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Host Of The #SmartMoneyCircle Podcast, Founder and CEO of 50 Park Investments. Adam provides weekly market updates to ChartYourTrade.com readers. He is a FORBES Contributor and is a frequent guest on all the major financial media outlets.
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Disclaimer: All communication from ChartYourTrade is general in nature and for educational and general informational purposes only. Under no circumstance should it be considered personalized investment advice. All our work is general in nature and not specific to any one person. All the information on this site and/or that originates from us, or any of our partners or affiliates, is for educational and informational purposes only and is NOT a recommendation to buy or sell anything. To avoid any conflicts of interest, we do not have a working relationship with any of the companies mentioned in our work. Furthermore, we may have a long, short, or no position in any, or all, of the names that appear in our work and they may change at any time without notice. Investing and trading in capital markets or using margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you as well as for you. Before you decide to invest or trade in capital markets you should carefully consider your investment objectives, level of experience, and risk appetite, among other factors. The possibility exists that you could sustain a loss of some, all, or more of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with capital markets, investing/trading, and seek specific investment advice from an independent financial advisor and other professionals. Remember all the information we provide is for educational and general informational purposes only and is subject to change without notice.
Stocks Get Smacked On Lackluster Economic Data
Thursday, June 24, 2010
Stock Market Commentary:
The major averages got smacked on Thursday sending the benchmark S&P 500 Index to its longest losing streak in seven weeks, dragged lower by the ailing financial sector and the latest round of tepid economic data. Volume totals were reported higher on the NYSE and the Nasdaq exchange compared to Wednesday’s levels which marked the latest distribution day and suggests large institutions are aggressively selling stocks. Decliners trumped advancers on the NYSE and on the Nasdaq exchange. There were only 2 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, barely higher than the 1 issue that appeared on the prior session. Leadership has evaporated, and without a healthy crop of leaders hitting new highs it is hard for the major averages to sustain a rally. New 52-week highs outnumbered new 52-week lows on the NYSE but trailed by a large margin on the Nasdaq exchange.
Lackluster Economic Data Rocks The Market:
Before Thursday’s opening bell, two separate government reports showed unemployment claims fell from a two-month high while durable-goods orders excluding transportation rose slightly. The Labor Department said weekly jobless claims (i.e. the number of Americans applying for jobless benefits) slid by -19,000 to 457,000 in the week ended June 19. Elsewhere, the Commerce Department said durable goods, goods meant to last at least three years, excluding autos and aircraft, rose in May for the third time since February 2010. However, the overall reading was down -1.1%. The fact that the major averages sold off on the news suggests investors were not pleased with the results. After the close, both Oracle (ORCL) and Research In Motion (RIMM) posted their latest quarterly results which sent ORCL higher and RIMM lower in after hours trade.
Market Action- Rally Under Pressure:
Technically, the fact that both the Dow Jones Industrial Average and the S&P 500 Index continue falling after closing below their respective 200-day moving average (DMA) lines earlier this week suggests the market may retest its recent lows. Looking forward, the 50 DMA line may act as stubborn resistance and this month’s lows should act as support. Since the June 15, 2010 follow-through day (FTD), this column has steadily noted the importance of remaining very selective and disciplined because all of the major averages are still trading below their downward sloping 50-day moving average (DMA) lines. This week’s sell-off simply confirms that view. Trade accordingly.
Are You Ready For A Change?
Inquire Today About Our Professional Money Management Services:
If your portfolio is greater than $250,000 and you would like a free portfolio review, Click Here to learn more about our money management services. * Serious inquires only, please.
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Disclaimer: All communication from ChartYourTrade is general in nature and for educational and general informational purposes only. Under no circumstance should it be considered personalized investment advice. All our work is general in nature and not specific to any one person. All the information on this site and/or that originates from us, or any of our partners or affiliates, is for educational and informational purposes only and is NOT a recommendation to buy or sell anything. To avoid any conflicts of interest, we do not have a working relationship with any of the companies mentioned in our work. Furthermore, we may have a long, short, or no position in any, or all, of the names that appear in our work and they may change at any time without notice. Investing and trading in capital markets or using margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you as well as for you. Before you decide to invest or trade in capital markets you should carefully consider your investment objectives, level of experience, and risk appetite, among other factors. The possibility exists that you could sustain a loss of some, all, or more of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with capital markets, investing/trading, and seek specific investment advice from an independent financial advisor and other professionals. Remember all the information we provide is for educational and general informational purposes only and is subject to change without notice.
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