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Market Indecision Continues…

  • Written by Syndicated Publisher No Comments Comments
    May 22, 2014

    We’re almost five months into the year, with the major indexes still within a couple of percentage points +/- of their December close, and repeatedly failing in attempts to break out to either the downside or upside.

    Year to date: Dow: -0.7%    S&P 500: +2.2%   Nasdaq:  –1.2%

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    The Nasdaq (and Russell 2000) have shown more movement. They broke below support levels and pulled back until becoming short-term oversold beneath 50-day m.a.’s. And they’ve continued to show more movement than the rest of the market, this time moving slowly to the upside as they tentatively rally off the oversold condition, but remain beneath the potential resistance at the m.a.

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    Since the economy (GDP) slowed much worse than thought in the 1st quarter, to only 0.1 % growth, the market’s direction almost surely depends on whether the sharp winter slowdown was entirely weather related.

    And the jury is still out on that.

    There is evidence in both directions. In the March reports retail sales, manufacturing, and jobs seemed to be bouncing back, and auto sales were holding their own. The main concern was the continuing dismal reports from the important housing industry.

    But the April reports had some surprises, including that retail sales slowed sharply in April, up just 0.1%, compared to 1.5% in March. And new housing starts were very strong in April but entirely due to a big jump in apartment building starts, while new single family home starts were up only a dismal 1%.

    And May reports include that consumer sentiment unexpectedly declined.

    We suspect the market is waiting for existing home sales on Thursday and new home sales on Friday. Those will provide a more accurate picture of whether housing is bouncing back after the winter slowdown.

    To read my weekend newspaper column click here:   Wall Street Says It’s Different This Time

    Images: Flickr (licence attribution)

    About The Author – Sy Harding, Street Smart Report

    Sy Harding publishes the financial website Street Smart Report Online and a free daily Internet blog at Sy’s Free Blog. In 1999 he authored Riding The Bear – How To Prosper In the Coming Bear Market. His latest book is Beat the Market the Easy Way! – Proven Seasonal Strategies Double Market’s Performance!

    It includes our research and analysis on the economy and markets, and provides charts and buy and sell signals on the major market indexes, sectors, bonds, gold, individual stocks and etf’s, including short-sales and ‘inverse’ etf’s.

    It provides two model portfolios as guides. One is based on ourSeasonal Timing Strategy, one on our Market-Timing Strategy.

    In depth updates are provided every Wednesday, with interim ‘hotline’ updates every time we make a trade. An 8-page traditional newsletter Street Smart Report is provided on the website every 3 weeks, in pdf format for viewing or printing out.

    There is the Street Smart School of online technical analysis ‘seminars’,commentaries to keep you ‘street smart’ about Wall Street, and much more. 

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