| Monday, May 10th, - Current Market Analysis
|
 |
Markets Pullback - Lose Ground For Week |
 |
|
|
After having closed above key support levels the previous week, the indexes dropped back and lost ground for this one
A pullback had been technically expected so this was no big surprise.
Rising Oil prices, with crude hitting $126 a barrel, was probably the the main negative fundamental catalyst for
the downward slide, as well as several negative earnings reports and other unfavorable financial news.
Take a look at the first weekly chart below and you can see how the market was deflected lower off of a heavy overhead
resistence line.
It was Wednesday the markets really rolled off a cliff, with the selloff extremely broad-based,
for instance, 24 out of the Dow 30 dropping and 93 of the Nasdaq 100 falling. The Dow ended the day down
206.48, or 1.59% at 12,814.35, back below the 13,000 level.
The indexes had risen over 10% in the past 6 weeks. It was only a matter of time before some
profit taking would take place.
For the Week:
The Dow closed at 12,745.88, declining 312 points or -2.4%.
The S&P closed at 1,388.28, declining 25 points or -1.8%.
The Nasdaq closed at 2,445.52 declining 31 points or -1.3%
The indexes are back down below 30-week moving averages. (The 30-Week SMA is a barometer of longer term strength or weakness - See Weekly Charts Below)
|
|
|
|
|
|
|
What To Expect This Week |
|
The Big Picture. Markets Slide.
The technical picture for the indexes returns to somewhat negative Since the lows of March, the market
has been working its way higher in an upward sloping channel. On the weekly timeframe, you will see that the Dow and S&P 500 indexes closed above their 30-week moving averages.
Also, the indexes, notably the Dow and S&P 500 have dropped back down below above the key technical levels of 13,000 and 1400 respectably. Also notice on the weekly timeframe that the S&P 500 fell back below its "neckline" on the Classic Head and Shoulders Pattern. (See Weekly Charts Above)
Also, the S&P 500 and the Nasdaq are still below downward sloping 200-Day moving averages on the daily timeframe
and a MAJOR OVERHEAD RESISTENCE LINE on the Weekly charts, as well as their 30-Week SMAs.
On the monthly chart, the market BELOW ITS MAJOR SUPPORT TRENDLINE and still below its 15-month
moving average. (See Monthly Chart Above)
What To Expect
While the overall bias is still to the downside on a medium term basis, as well as a
short-term basis, mainly because this pullback hasn't fully played itself out.. we
could see a slight "knee-jerk" buying reacion at the beginning of this week
which would cause the markets to pop. How long this would last is anyones guess.
Its a bit of a coin-flip at this point and we will have to see how investors endure
the spike in oil prices.
Many excellent trading setups develop
during all market conditions in strongly trending stocks - (now including Shorting Candidates!) - that
are picked up by Stock-Signal-Pro's new market
scanner.
See: Using The
Scanner To Locate High Momentum Stocks
|
|
| |
