The major averages ended lower as the dollar rallied after European debt woes continued to spread. As expected volume was lighter compared to Friday’s heavy options expiration levels. Decliners led advancers by more than a 23-to-15 ratio on the NYSE and by nearly a 2-to-1 ratio on the Nasdaq exchange. New 52-week lows outnumbered new 52-week highs on the Nasdaq but trailed on the NYSE. Leadership was narrow on Monday as 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, higher than the 0 issues that appeared on Friday. It is difficult for the market to rally without a healthy crop of strong leaders.
Spanish Bank Fails:
Fresh contagion woes spread after Spain said it stepped in to save one of its largest banks. The Bank of Spain put CajaSur, a large Spanish bank, under a provisional administrator after the bank lost 596 million euros ($739 million) on 426 million euros in revenue last year. This sent a slew of financial shares lower across the globe as investors were concerned that more banks will fail.
Existing Home Sales Rise; But Housing Stocks Fall:
In the US, the National Association of Realtors said sales of existing homes (i.e. previously owned homes) rose in April to the highest level in five months. The report said buyers scrambled to buy the homes before the government’s tax credit expired. Sales increased +7.6% to a 5.77 million annual rate. This was the highest reading since November 2009 which was the month the incentive was first due to expire. Initially, housing stocks rallied on the news but the bears quickly showed up and quelled the bulls’ efforts.
Market Action- In A Correction:
Monday marked Day 2 of a new rally attempt which means that as long as Friday’s (Day 1) lows are not breached, the earliest a possible FTD could emerge would be this Wednesday (Day 4). However, if at anytime, Friday’s lows are breached, then the day count will be reset. What does all of this mean for investors? Simple, the market remains in a correction which reiterates the importance of adopting a strong defense stance until a new rally is confirmed. Trade accordingly.
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 Edge Lower As EU Debt Woes Spread
Monday, May 24, 2010
Stock Market Commentary:
The major averages ended lower as the dollar rallied after European debt woes continued to spread. As expected volume was lighter compared to Friday’s heavy options expiration levels. Decliners led advancers by more than a 23-to-15 ratio on the NYSE and by nearly a 2-to-1 ratio on the Nasdaq exchange. New 52-week lows outnumbered new 52-week highs on the Nasdaq but trailed on the NYSE. Leadership was narrow on Monday as 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, higher than the 0 issues that appeared on Friday. It is difficult for the market to rally without a healthy crop of strong leaders.
Spanish Bank Fails:
Fresh contagion woes spread after Spain said it stepped in to save one of its largest banks. The Bank of Spain put CajaSur, a large Spanish bank, under a provisional administrator after the bank lost 596 million euros ($739 million) on 426 million euros in revenue last year. This sent a slew of financial shares lower across the globe as investors were concerned that more banks will fail.
Existing Home Sales Rise; But Housing Stocks Fall:
In the US, the National Association of Realtors said sales of existing homes (i.e. previously owned homes) rose in April to the highest level in five months. The report said buyers scrambled to buy the homes before the government’s tax credit expired. Sales increased +7.6% to a 5.77 million annual rate. This was the highest reading since November 2009 which was the month the incentive was first due to expire. Initially, housing stocks rallied on the news but the bears quickly showed up and quelled the bulls’ efforts.
Market Action- In A Correction:
Monday marked Day 2 of a new rally attempt which means that as long as Friday’s (Day 1) lows are not breached, the earliest a possible FTD could emerge would be this Wednesday (Day 4). However, if at anytime, Friday’s lows are breached, then the day count will be reset. What does all of this mean for investors? Simple, the market remains in a correction which reiterates the importance of adopting a strong defense stance until a new rally is confirmed. Trade accordingly.
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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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