Sovereign Debt Worries Return

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(via COMTEX News Network)--

by an AdviceTrade.com publication

Market Recap: European top officials met in Brussels to discuss Italy as well as the broader euro zone crisis ahead of a meeting of euro zone finance ministers. With foreign markets lower across the board, futures tumbled further Monday pressured by Monday’s weak nonfarm payrolls report, which reignited fears of a slowdown and as Italian debt fears spooked markets. In addition, China's CPI report created new worries about monetary policy and economic growth in the world's strongest economy. There was no economic data slated for release today. The Monday session opened with a large gap lower and trended lower throughout the session with only a couple of significant bounces, one just after 11:00 am and the other at about 1:15 pm. But this was a trend day that was controlled by sellers. Friday's close proved to be a bull trap. Checking our Market Leaders board after Monday's session, our board shows that every leader closed lower. Leading the way lower were the Financials (XLF) and the small caps (Russell 2000). It has been rare recently to see the Russell 2000 showing relative weakness. Another item to notice today is that the broad NYSE Composite Index was weaker than the SPX; this is most often a bearish signal. SPX big winners were Clorox Co (CLX) 2.85%, Tellabs Inc (TLAB) 2.34%, and Dentsply Internat Inc (XRAY) 1.81%. SPX big losers were Janus Capital Group Inc (JNS) -6.95%, Genworth Financial (GNW) -6.52%, and Ameriprise Financial Inc (AMP) -5.58%. SPX five day big winners are Whole Foods Market Inc (WFM) 11.12%, Tellabs Inc (TLAB) 7.04%, and Pulte Homes Inc (PHM) 7.%. SPX five day big losers are Motorola Mobility Holdings Inc (MMI) -10.39%, E Trade Financial Corp (ETFC) -9.55%, and JDS Uniphase Corp (JDSU) -9.35%. New Ten Day Highs: CLX, EBAY, EQT, EXPE, IGT, KLAC, MON, PM, TJX, VFC New Ten Day Lows: AMD, AMGN, BAC, BBT, BBY, HRB, CCL, CMA, DF, ETFC, EK, ETR, FII, FHN, FRX, GNW, HRS, HAS, HSP, HUM, JDSU, LIFE, MRO, MAS, MKC, MDT, WFR, TAP, MS, NWSA, NVDA, ODP, JCP, PFE, RTN, RHI, SCHW, SNI, SLM, LUV, TLAB, TMK, TSN, JASO, KBH, VMC, WLP Market Trend: Nine Sectors Report Looking at our Nine Sectors Report after Monday's action we had no changes. Our Nine Sectors signal therefore remains a Sell. There are many reasons to expect lower prices ahead but something of a bounce often comes after a large down day such as this. Volume & Breadth Indicators For the SPX Index there were 9 components advancing and 467 components declining. On the NYSE 3,125 issues were traded with 446 advancing issues and 2,602 retreating issues, a ratio of 5.83 to one declining. There were 35 new highs and 30 new lows. The five day moving average of New Highs is 142 while the five day moving average of New Lows is 14 and the ten day moving average of Net Advancing is 625. The Net Advancing data indicates a bullish trend. Declining volume was higher at a ratio of 31.33 to one. The closing TRIN was 4.58 and the final tick was -92. The five day average of TRIN is 2.02 and the ten day average of TRIN is 1.37. The NYSE Composite Index lost -2.16% today while the SPX lost -1.84%. For the NYSE, relative to the previous 30 session average, volume was -16.19% below the average. Of the last 15 sessions 2 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 14 sessions ended on a positive tick, 7 of last 10. For the SPX, the day's volume was 92.2% of the average daily volume for the last year. Volume was 99.2% of the last 10 day average and 104.8% of the previous day’s volume. Check out that declining volume ratio. The last time we saw anything close to that was June 1st. The broad NYSE Composite Index is also suggesting that we see lower prices to come. Total tick for the day was -152,000 and the average tick for the day was -98. There were 23 ticks greater than 600 and 102 ticks more extreme than -600. There were no ticks greater than 1000 and 8 ticks more extreme than -1000. The tick action suggests institutional distribution. Our tick chart for Monday is completely red. The bears were in full control today but the tick action shows that this was an orderly retreat without a lot of panic. The low number of ticks above 1000 suggests a lack of panic but institutions were obviously in distribution mode as shown by the ticks above 600. Monday’s volume was similar to Friday's volume. The intraday volume pattern appears meaningless. Our Nightly Breadth Indicators are mixed after Monday's action but the McClellan Oscillator ten day average continues to be overbought. This would seem to suggest that this correction is just beginning. Moving Average and Support/Resistance Indicators: 6.2% of the SPX are above their five day moving average, 38.4% are above their 10 day average, 70.4% are above their 20 day moving average, 52.2% are above their 50 day moving average, and 63.8% are above their 200 day moving average. We had one significant moving average crossover Monday as Germany's 20 DMA crossed below the 100 DMA. Take a look at our chart and notice the middle section: Green on the outside columns and solid red in the middle two columns. This is bearish looking and what we usually see after a rally during a downtrend. Our moving average Power Rating is 49 of a possible 100. Sectors on the Move: Sectors stronger than the SPX for Monday: - Technology -- Outperformed the SPX by +9%. - Consumer Staples -- Outperformed the SPX by +108%. - Utilities -- Outperformed the SPX by +74%. - Health Care -- Outperformed the SPX by +43%. Sectors weaker than the SPX for Monday: - Basic Materials -- Underperformed the SPX by -23%. - Energy -- Underperformed the SPX by -60%. - Financials -- Underperformed the SPX by -101%. - Industrials -- Underperformed the SPX by -3%. - Consumer Discretionary -- Underperformed the SPX by -15%. Tuesday, July 12 Economics 08:30Trade Balance GBP Nationwide Consumer Confidence 00:30AUD NAB Business Confidence 06:00 EUR German CPI 08:30 GBP CPI 08:30 GBP RPI 08:30 GBP Trade Balance (pounds) Earnings Before: FAST, INFY, WWW After: ADTN, HCSG, MILL Thank you for reading. Think on it, trade on it, and be well. -Mel Today's Trade Alerts

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