It was a dismal week on Wall Street as the latest rally failed, the major averages violated support, and fell to fresh 2010 lows. As expected Friday’s pre-holiday volume totals were reported lower on the NYSE and the Nasdaq exchange compared to Thursday’s levels. Decliners led advancers by a 10-to-9 ratio on the NYSE and by a 16-to-11 ratio on the Nasdaq exchange. There were only 4 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, the same reading as the prior session. Meanwhile, new 52-week lows substantially outnumbered new 52-week highs on the NYSE and the Nasdaq exchange. As leadership evaporated in recent sessions, in this commentary it was repeatedly noted – “Without a healthy crop of leaders hitting new highs it is hard for the major averages to sustain a rally.”
Monday-Wednesday’s Action; Stocks Fall Hard During Q2:
Stocks closed lower on Monday after a relatively benign G-20 meeting. The G-20 met in Toronto and pledged to cut deficits in order to help stabilize the global economy. Elsewhere, US consumer spending and personal income rose. On Tuesday, stocks fell hard across the globe after concern spread that China’s robust economy was slowing. China’s leading economic indicators fell and Citigroup (C) said China’s exports will face “strong headwinds” in the second half of the year due to stricter measures from Beijing and the ongoing European debt crisis. US stocks continued to fall after US consumer confidence tanked in June. The Conference Board’s index of consumer confidence fell to 52.9 from May’s revised reading of 62.7. The dismal labor market was cited as a primary cause for the ongoing malaise. Elsewhere, the S&P/Case-Shiller index of home prices rose +3.8% from April 2009 which was the largest year-over-year gain since September 2006.
The second quarter ended on Wednesday sending the Nasdaq Composite and the benchmark S&P 500 Index both fell -12% while the Dow Jones Industrial Average and the small cap Russell 2000 Index skidded –10%, marking their worst quarters since Q4 2008. It was the tech-heavy Nasdaq’s worst second quarter since 2002. In addition, it was worrisome to see the S&P 500 close below 1,040 which has served as formidable support for most of the year.
Thursday-Friday’s Action; Jobs Fall -125,000 Jobs Last Month:
On Thursday, stocks slid after a series of tepid economic reports were released. US jobless claims unexpectedly rose to 472,000 last week, pending home sales tanked at twice the rate Wall Street had expected and US manufacturing echoed the ominous news from Europe and Asia. This was the latest round of tepid economic data which suggests the economic recovery is less than stellar. Stocks ended lower on Friday after the Labor Department said US employers slashed -125,000 last month and the jobless rate fell to 9.5% and factory orders ticked down last month.
Some might say that Thursday was Day 1 of a new rally attempt due to the fact that the major averages closed in the upper half of their intra-day ranges, recovering from steep losses in the first half of the session. That still does not change the fact that the market is in a correction which emphasizes the importance of raising cash and adopting a strong defensive stance until a new follow-through day emerges. For the past several weeks, 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. Their 50 DMA line may continue to act as stubborn resistance. It was also recently noted that a series of capital markets (Crude oil, Copper, NYSE Composite Index, among others) 50 DMA line already sliced below the 200 DMA line, an event known by market technicians as a “death cross” which usually has bearish implications. On Friday, the benchmark S&P 500 Index’s 50 DMA line officially undercut its longer term 200 DMA line which means the benchmark index can be added to the list. Trade accordingly.
Want To Jump Start Your Portfolio?
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
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.
Claim Your Free Guide Today
Give us your email and we will give you the tools to change your life.
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.
Tough Week On Wall Street
Friday, July 2, 2010
Stock Market Commentary:
It was a dismal week on Wall Street as the latest rally failed, the major averages violated support, and fell to fresh 2010 lows. As expected Friday’s pre-holiday volume totals were reported lower on the NYSE and the Nasdaq exchange compared to Thursday’s levels. Decliners led advancers by a 10-to-9 ratio on the NYSE and by a 16-to-11 ratio on the Nasdaq exchange. There were only 4 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, the same reading as the prior session. Meanwhile, new 52-week lows substantially outnumbered new 52-week highs on the NYSE and the Nasdaq exchange. As leadership evaporated in recent sessions, in this commentary it was repeatedly noted – “Without a healthy crop of leaders hitting new highs it is hard for the major averages to sustain a rally.”
Monday-Wednesday’s Action; Stocks Fall Hard During Q2:
Stocks closed lower on Monday after a relatively benign G-20 meeting. The G-20 met in Toronto and pledged to cut deficits in order to help stabilize the global economy. Elsewhere, US consumer spending and personal income rose. On Tuesday, stocks fell hard across the globe after concern spread that China’s robust economy was slowing. China’s leading economic indicators fell and Citigroup (C) said China’s exports will face “strong headwinds” in the second half of the year due to stricter measures from Beijing and the ongoing European debt crisis. US stocks continued to fall after US consumer confidence tanked in June. The Conference Board’s index of consumer confidence fell to 52.9 from May’s revised reading of 62.7. The dismal labor market was cited as a primary cause for the ongoing malaise. Elsewhere, the S&P/Case-Shiller index of home prices rose +3.8% from April 2009 which was the largest year-over-year gain since September 2006.
The second quarter ended on Wednesday sending the Nasdaq Composite and the benchmark S&P 500 Index both fell -12% while the Dow Jones Industrial Average and the small cap Russell 2000 Index skidded –10%, marking their worst quarters since Q4 2008. It was the tech-heavy Nasdaq’s worst second quarter since 2002. In addition, it was worrisome to see the S&P 500 close below 1,040 which has served as formidable support for most of the year.
Thursday-Friday’s Action; Jobs Fall -125,000 Jobs Last Month:
On Thursday, stocks slid after a series of tepid economic reports were released. US jobless claims unexpectedly rose to 472,000 last week, pending home sales tanked at twice the rate Wall Street had expected and US manufacturing echoed the ominous news from Europe and Asia. This was the latest round of tepid economic data which suggests the economic recovery is less than stellar. Stocks ended lower on Friday after the Labor Department said US employers slashed -125,000 last month and the jobless rate fell to 9.5% and factory orders ticked down last month.
Some might say that Thursday was Day 1 of a new rally attempt due to the fact that the major averages closed in the upper half of their intra-day ranges, recovering from steep losses in the first half of the session. That still does not change the fact that the market is in a correction which emphasizes the importance of raising cash and adopting a strong defensive stance until a new follow-through day emerges. For the past several weeks, 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. Their 50 DMA line may continue to act as stubborn resistance. It was also recently noted that a series of capital markets (Crude oil, Copper, NYSE Composite Index, among others) 50 DMA line already sliced below the 200 DMA line, an event known by market technicians as a “death cross” which usually has bearish implications. On Friday, the benchmark S&P 500 Index’s 50 DMA line officially undercut its longer term 200 DMA line which means the benchmark index can be added to the list. Trade accordingly.
Want To Jump Start Your Portfolio?
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
Here are more articles you may like
September 4, 2024: Another Leg Down
Sellers showed up yesterday (9/3/2024), and if we weren’t convinced the recent rally attempt had
August 30, 2024 — So Long for Now, Semiconductors
Although $NVDA had a good earnings report, the stock price fell, and the $SMH and
Podcast: Swing Trading
Over the last month, our guests Michael Lamothe and Dennis Wilborn have told us a
Adam Sarhan
Claim Your Free Guide Today
Give us your email and we will give you the tools to change your life.
FREE 7 DAY EMAIL COURSE
Learn about Early Entry Points & much more...
© ChartYourTrade | Contact us: website@chartyourtrade.com
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.
Charts and Data are courtesy of MarketSmith Incorporated. Join MarketSmith here.
Terms of Service