Stocks Fall As Consumer Credit Contracts


Wednesday, April 7, 2010
Market Commentary:

The major averages ended lower, experiencing their largest single day decline since February, after consumer credit fell and concern about Greece defaulting accelerated. Volume totals on the NYSE and on the Nasdaq exchange were reported higher compared to Tuesday’s totals which marked the latest distribution day for the major averages in recent weeks. Breadth was negative as decliners led advancers by about a 2-to-1 ratio on the NYSE, and by a 4-to-3 ratio on the Nasdaq exchange. New 52-week highs trumped new lows on both exchanges yet again. There were 52 high-ranked companies from the Leaders List that made a new 52-week high and appeared on the BreakOuts Page, down from  the 58 issues that appeared on the prior session.

Consumer Credit Contracts; Stocks Fall:

The Federal Reserve said consumer borrowing slid by a larger than expected reading of $11.5 billion in February. The fear that lower consumer spending may curtial economic growth played a pivotal role in sending stocks lower on Wednesday. In Europe, fear spread that Greece may default after rejecting the EU-IMF backed aid package. This sent the euro lower (greenback higher) for a third consecutive day which put pressure on dollar denominated assets- mainly stocks and commodities. 

Market Action- Confirmed Rally:

The benchmark S&P 500 Index currently has 5 distribution days while the Nasdaq Composite and Dow Jones Industrial Average have 4 since the March 1, 2010 follow-though-day (FTD). These distribution days have not been damaging, and normally it is considered healthy for the major averages to have less than 4 distribution days in a four week period. Therefore, the fact that we currently have 5 distribution days for the S&P 500 suggests a more cautious approach may be prudent. Trade accordingly.

Professional Money Management Services: Free Portfolio Review:
Our skilled team of portfolio managers knows how to follow the rules of this fact-based investment system. If your portfolio is greater than $100,000 and you would like a free portfolio review,
Click Here to get connected with one of our portfolio managers. ** Serious inquires only, please. 


Here are more articles you may like

Claim Your Free Guide Today

Give us your email and we will give you the tools to change your life. 


Learn about Early Entry Points & much more...

© ChartYourTrade | Contact us:

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