Have stocks hit a bottom? We never know for sure until we get to look at it from a rear view mirror. On a near term basis, if yesterday's low (S&P 500 at 1820) wasn't a near term bottom, it is probably very close to a bottom. However, that doesn't mean stocks are in for a V shape recovery. If you look at the charts of the S&P 500 during the two periods after QE1 and QE2 ended, April-August 2010 and July-November 2011, respectively, stocks went sideways after the initial plunge. The initial low was broken or retested along the way. It took a few months for stocks to finally settle down and resume their uptrend.
Although there was heavy selling this morning and a decent bounce in the afternoon, we still have no capitulation. I thought we had capitulation today but it looks the dip buyers and short coverings. The S&P 500 is only 7.4% off it record close. It hasn't even had a correction (10% correction would take it to 1810). Dip buyers are too fast to buy and yet, there wasn't enough buying to turn the trend around. Both the short term and intermediate term trends are still down. The stock market, which has being rising nearly non-stop from November 2012 to early September 2014, is going through a mean reversion. Instead of dip buying and V-shaped bounces, we are likely to see more rip selling and inverse-V slides in the next few months. In the very near term, the outperformance by the small caps suggests that stocks could be close to a near term low. A retest of today's low on lower volume will likely bring in more dip buyers. With that said, the character of the market has changed. Volatility helps short term traders. If you are looking for long term positions, be very careful and go slow.
Notable earnings due out on Thursday include: GS, UNH, COF, DAL, BHI, SLB, AMD, GOOGL, SNDK and XLNX.
and a lot of the stocks recovery especially Tech as well as OIL and Industrial, we had the CAPITULATION today and we shall see RECOVERY from here back to 2000 on the S&P500. We should see the market open high and continue to climb. Have a nice day.
We need to see capitulation but technical damage has been done so cant tell how far we will slide, but FED once again will come to the rescue with QE4, this US sanction and EU sanction against Russia is costing the Europeans a lot more than the US. Besides all the gurus claim after a BULL run comes Recession, but with the Bank CEO's claiming improving US economy its seems to be a tug of war between 2 opinions.
By holding onto the gains, stocks are giving investors a chance to breathe a sigh of relief. However, the morning gain followed by afternoon selloff continued to suggest that the gains were driven by short sellers covering their positions. It will take a lot more rallies to get real buyers in and the major indexes out of their downtrend. The S&P 500 will need to reclaim its 200-day moving average which stands at 1906. Should that happen and the much-watched moving average holds, we are likely to see dip buyers making moves. We are at the beginning of the earnings season which doesn't look too bad for now.
Notable earnings due out on Wednesday include: AXP, BAC, LVS, EBAY and NFLX.
It has mostly been sunny skies in the stock market in the past two years. Now when it rains, it pours, as if it tries to make up for the lack of rain in the prior two years. The Russell 2000 is now down for six weeks in a row. Last time that happened was in 2005. Stocks are due for an oversold bounce but there is little reason for buyers to get in, as we haven't seen a capitulation. After all, the S&P 500 is only 5.2% off its record close on September 18.
Earnings season starts next week. It is likely to give investors a better picture in terms of how those global grow concerns will affect companies' bottom line. C, JPM, WFC, INTC, JNJ and CSX are due to report on Tuesday. AXP, BAC and NFLX report on Wednesday, followed by DAL, GS, GOOGL and UNH on Thursday. The week finishes with reports from GE and MS.
Wait till after the earnings or just before the end of the month to get in as by then all the selling and window dressing by the funds would have been completed.
The month of October is the end of the Fiscal year for the Mutual Funds, Hedge Funds and Pension Funds etc They will sell to lock in their profits. It happens every year. Normally the month of September is a disaster but since everyone was expecting September to blow up the market did the opposite, it packed the punch in the month of October. Also remember the market has gone up since 2009 without any major correction. I think the market capitulated this morning and hopefully we should stabilize. I would still wait, maybe intel will hit 27-28 area again where the support lies and is a good entry point. I was lucky I got out at 35 as I needed the cash to buy my dream home. Have a nice day and be patient. Market will end with S&P at 2000 for 2014.
As much as day before yesterday's rally was about being overly jubilant, yesterday's selling felt a little too panicky. After all, the U.S. economic data continued to be respectable. While stocks plunged today, both the 10-year and 30-year bond yields were unchanged, signaling that bond yields may have hit a near term low. Investors have been pulling cash out of stocks but they didn't put it into bonds. Eventually, those cash will have to be invested and stocks look to be the best place to go. That being said, a selling isn't over until it is over. It will probably take a further capitulation before buyers step in. The S&P 500 made a closing low today but held yesterday's, as well as October 2, intraday low. The Russell 2000 held yesterday's intraday low also. We'll see whether that can give stocks a silver lining. For the S&P 500, watch for support near 1925, followed by 1905, its 200-day moving average.
The Fed is again the canary in a coal mine. Both the S&P 500 and the DJIA reclaimed their respective 100-day moving average yesterday. The uptrend started in November 2012 is saved. The question now is whether the Fed can bring us some decent follow-through. A one day rally doesn't make a trend and the S&P 500 could face resistance near 1973, its declining 50-day moving average. In spite of yesterday's rally, the Russell 2000 is still in a funk. It will need to climb above 1100 just to get on top of its 10-day moving average.
With the Fed temporarily out of the way until near the end of the month, earnings are likely to drive the market in the next couple of weeks. AA reported after the bell. From first look, it was a good one. Stay selective during an earnings season.
Every time stocks close near the low of a session, we need to prepare for further downside in the next session. It was a poor session today. Selling accelerated late in the afternoon while VIX (+11.25% at 17.20, highest settlement since February) spiked. A weak open tomorrow is likely to bring in an oversold bounce. However, the market looks to be in the middle of a trend change with the S&P 500 dipping below its 100-day moving average and the Russell 2000 below its well-defined support at both of its February and May lows. Let the selloff run its course and don't try to catch a falling knife. Support for the S&P 500 comes in near 1904.
More and more, small caps are getting attention from investors. All the media talks about today's morning reversal blamed the small caps. It is true that small caps are weak. The Russell 2000 has spent a dozen sessions beneath its 10-day moving average. The large caps are weak too. Both the DJIA and the S&P 500 couldn't reclaim their 50-day moving averages even after last Friday's big rally. However, don't get too bearish yet. The Russell 2000 is still above its support near 1082 while both the DJIA and the S&P 500 are holding above their respective 100-day moving averages. Stocks are in a make-or-break juncture as they wait on the start of the third quarter earnings season. The FOMC will meet again near the end of the month. All these are going to make the rest of October a choppy one. Stay cautious.
Bulls survived an eventful week with fresh records by both the S&P 500 and the DJIA. However, there are too many negative divergences to ignore. First, the market continued to get narrower with gains led by larger stocks which make up the large-cap indexes while the small and mid- cap stocks did poorly. The Russell 2000 has been down for three straight weeks while the S&P 400 was down for a second straight week. Secondly, the market internals have been deteriorating. After reaching a high in early September, the NYSE advance/decline line has been sliding and currently shows no signs of reversing that downtrend. Finally, new 52-week lows on both the NYSE and the NASDAQ have been expanding and are now at the highest level since early August.
For the broader market to continue to climb higher, those negative divergences will need to catch up soon. Unless we see that happens, stay cautious.
Stocks are in good technical condition for more upside as they aren't overbought yet. However, the market internals continued to be not as strong as the gains in the major indexes would have suggested, as small cap stocks lagged again. Tomorrow is a quadruple witching day. Expect heavy volume. In addition, the highly anticipated BABA IPO is likely to stir up the whole internet sector, taking other stocks in the sector for a swing.
Was the Fed statement really dovish? It depends on where you look. The stock market says yes. The bond market says no as bond yields rose. One thing seems to be sure is that QE will end next month and the Fed will most likely start raising rates sometime next year. Whether that is going to be mid-year or late year probably doesn't matter, as rates are still going to be exceptionally low even after a little raise. Stock prices are likely to be depended more on the economic growth than they have been in the past several years. Technically, the major indexes spent last week working off their overbought condition and look to have more room on the upside. Outperformance by financials and selective technology stocks also bodes well for the bulls. However though, the stock market remains a narrow one. Stay selective and stay nimble.
Bulls are losing momentum. But for now, it is just an overbought pullback. Uptrend doesn't seem to be at risk at this point. Attention will turn to the August jobs report tomorrow. The market expects nonfarm payrolls to increase by 223,000 with the unemployment rate edging down to 6.1%. Stocks' reaction to the economic data has been rather muted recently, as investors seem to have already bet on a stronger economy and the central bank policies have outweighed the economic data. A weak jobs report could potentially be good news for the market. In the meantime, the S&P 500 has been down three days in a row. It hasn't had a losing streak longer than that in 2014. We'll see whether it can keep that track record going tomorrow.
For two days in a row the S&P 500 reached a new record during the day but finished lower. It suggests that the bulls are a little tired. It will take more pullback/sideways moves to work off the overbought condition. Should the ECB disappoint tomorrow, we will likely see more profit taking tomorrow.
was a good day to take some profits. Mkt tanked 5 percent from the high of 17,151 and has recovered almost 75 percent, S&P will hit 2K by year end but short term I doubt it. We will see a pullback in Sept as historically its a nasty month and last year Sept was not a bad month as most had expected.