Monday, June 1, 2010
Stock Market Commentary:
The major averages traded between positive and negative territory as investors digested the latest round stronger than expected economic data. On Tuesday, volume totals were mixed, reported slightly higher compared to Friday’s totals on the NYSE while the Nasdaq exchange’s volume total was lower. Decliners led advancers by over a 3-to-1 ratio on the NYSE and over a 4-to-1 ratio on the Nasdaq exchange. There were 5 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, sharply lower than the 12 issues that appeared on the prior session. New 52-week highs outnumbered new 52-week lows on the NYSE while new lows outnumbered new highs on the Nasdaq exchange.
Euro Hits New 2010 Low As Financials & Energy Shares Tumble:
The major averages opened lower, turned positive, then closed in the red as the bears overpowered the bulls on the first trading day of this shortened holiday week. A slew of financial and energy stocks tumbled after BP Amoco PLC (BP –14.85%) said that they were not able to stop the leak in the Gulf of Mexico. BP gapped down on monstrous volume and hit a fresh one year low after news spread that the earliest they will be able to plug the leak will be August. In other news, the ISM manufacturing index topped estimates and the euro plunged to a fresh 2010 low which reiterated fears that the ongoing contagion woes will worsen.
Market Action- In A Correction:
The Nasdaq composite sliced below Thursday’s lows which reset the day count for that index. Meanwhile, the Dow Jones Industrial Average just ended Day 3 of a new rally attempt which opens the window for a proper follow-through day to emerge. Elsewhere, as long last Tuesday’s lows (1040) are not breached in the S&P 500, the window remains open for a proper FTD to occur. However, if at anytime last Tuesday’s lows are breached in the S&P 500, then the day count will be reset. What does all of this mean for investors? Simple, the market remains in a correction which reiterates the importance of adopting a strong defense stance until a new rally is confirmed. Trade accordingly.
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