Stocks Fall After Nikkei Plunges over 6% As Correction Deepens!

Byinfo@50park.com

Monday, March 14, 2011
Stock Market Commentary:

Japan’s benchmark Nikkei index plunged over -6% on Monday as the country struggles to contain the effects of Friday’s devastating earthquake. The 28-week rally, which began on the September 1, 2010 follow-through day (FTD), ended on Thursday March 10, 2011 when all the major U.S. averages plunged below their respective 50 DMA lines on heavy turnover. The current crisis in the Middle East remains in flux which is putting upward pressure on oil and gold and downward pressure on equities. The benchmark S&P 500 is up nearly 100% from its March 2009 low, and still about -16% off its all-time high from October 2007.

Earthquake Aftermath, Demand Destruction, and More Unrest In The Middle East:

On Monday, the Bank of Japan (BOJ) said it would disperse a record amount of cash into the financial system and double the size of its asset-purchase plan to spark economic growth and curb the adverse affects of the nation’s worst earthquake on record. The BOJ pumped 15 trillion yen ($183 billion) into money markets on Monday to assure financial stability which did little to calm investor’s woes. Japan’s benchmark index tanked over 6% and credit risk spiked. This ominous action reaffirmed concerns that demand destruction (i.e. slower economic growth) will continue for the near future which hurts all asset classes. Elsewhere, riots spread in Bahrain and the civil war continued in Libya which raised concern of more civil unrest in the Middle East.

Market Action- Market In A Correction; 28-Week Rally Ends

All the major averages sliced below their respective 50 DMA lines on Thursday, March 10, 2011. Then, on Friday, all the major averages except for the tech-heavy Nasdaq composite managed to repair that damage and close above their respective 50 DMA lines which was a healthy sign which marked Day 1 of a new rally attempt. However, Friday’s lows were promptly breached on Monday as all the major averages dove below their 50 DMA lines on heavy volume. This ominous action reset the day count and reiterates the importance of raising cash and playing strong defense until a new FTD emerges. If you are looking for specific help navigating this market, please contact us for more information.

Don’t Miss Out!
See How Our New Site Can Help You!
Visit: www.SarhanCapital.com Today!

 

Similar Posts

  • Stagflation Woes & Stronger Dollar Send Stocks Lower

    Byinfo@50park.com

    On Tuesday, each of the major averages pulled back from logical resistance levels as leading stocks were mixed. The Dow Jones Industrial Average and benchmark S&P 500 index closed just below 10,500 and 1,115, their respective resistance levels. The Nasdaq composite closed just above 2200 which has served as an important level of resistance for the tech heavy index in recent months.

  • Dollar Falls; Stocks & Commodities Up

    Byinfo@50park.com

    Thursday, November 4, 2010 Stock Market Commentary: Stocks and commodities soared as the US dollar fell one day after the Federal Reserve announced a second round of quantitative easing. Volume patterns remain healthy as the major averages are now in their 10th week of their ongoing rally.On average, market internals remain healthy evidenced by an…

  • Day 1 Of A New Rally Attempt!

    Byinfo@50park.com

    Market Outlook- Market In A Correction:
    From our point of view, the market is back in a correction now that all the major averages closed below their respective 50 DMA lines and important upward trendlines. Since the beginning of May, we have urged our clients and readers to be extremely cautious as the major averages and a host of commodities began selling off.
    For those of you that are interested, the S&P 500 hit a new 2011 high on May 2, 2011. Two days later, on Wednesday, May 4, 2011, we turned cautious and said “The Rally Was Under Pressure” (read here). Then on Monday, 5.23.11, we changed our outlook to “Market In A Correction” (read here). On Monday June 6, 2011 we pointed out that the S&P 500 violated its 9-month upward trendline (read here) and reiterated our cautious stance. We have received a lot of “thank you” emails for being “spot on” in our cautious approach. We are humbled by your presence and very thankful for your continued support. Looking forward, the next level of resistance for the major averages is their respective 50 DMA lines then their 2011 highs. The next level of support is their longer term 200 DMA lines. If you are looking for specific help navigating this market, please contact us for more information.

  • Day 3 Of New Rally Attempt: Stocks Rally Ahead of Jobs Report

    Byinfo@50park.com

    Market Outlook- In A Correction:
    The major U.S. averages are back in a “correction” as they continue to flirt and in some cases hit fresh 2011 lows. Allow us to be clear: If all the major averages break below their 2011 lows, then we will likely see another leg down. Please, trade accordingly! Several high ranked leaders violated their respective 50 DMA lines in late September which bodes poorly for the bulls and suggests the bears are getting stronger. The latest follow-through day (FTD) which began on August 23, 2011 has officially ended which means we will begin “counting” days before a new rally can be confirmed. In addition, it is important to note that the bears remain in control of this market until the major averages trade above their longer and shorter term moving averages (50 & 200 DMA lines). Our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. . If you are looking for specific help navigating this market, please contact us for more information.
    Save Over 50%!
    Limited-Time Offer!
    www.FindLeadingStocks.com

Leave a Reply

Your email address will not be published. Required fields are marked *