Stocks and a slew of other “risk assets” bounced on Tuesday after Monday’s shellacking. As earnings and economic data continues to be released in droves, it is paramount that we not only pay attention to the actual numbers but how the stocks (and major averages) react to the numbers. This allows us to see how the market participants are “voting” and helps us filter out the noise and focus on what matters most: price action. Since the beginning of April, the action has been less than stellar. We also find it disconcerting to see the benchmark S&P 500, Russell 2000, the Dow Jones Industrial Average, and Nasdaq composite close below their 50 DMA lines.

Housing & Earnings Data Dominate The Headlines:

Stocks and a slew of risk assets opened higher on Monday as investors digested the latest round of economic and earnings data. A slew of earnings data was released which largely topped estimates. Meanwhile, the housing data was not ideal. The S&P Case-Shiller index, which measures home prices in 20 metropolitan areas around the country, fell for a sixth straight month. A separate report showed that new home sales plunged -7.1% which was the largest drop in almost a year and is not ideal for the ailing housing market, the jobs market, or the broader economy. The Conference Board said its consumer confidence index fell which is not ideal.

Market Outlook- In A Correction