Monday, May 16, 2011
Stock Market Commentary:
Stocks and a host of commodities were relatively quiet as the U.S. dollar fell and investors digested the latest data from the U.S. manufacturing sector and the U.S. housing market. So far, the old adage, “Sell in May and Go Away,” appears to be working brilliantly. From our vantage point, the market rally remains under pressure due to the lackluster action in the major averages and several leading stocks.
Manufacturing & Housing Data
Over the weekend, the head of the International Monetary Fund, Dominique Strauss-Kahn, was accussed of raping a cleaning lady at a NYC hotel. Before Monday’s open, the NY Empire State manufacturing index fell nearly 10 points to 11.88 which was higher than the boom/bust level of zero signalling expansion, albeit at a slower rate than prior months.
In other news, the National Association of Home Builders released its housing market index which is based on a survey in which respondents from the organization rate the condition of the general economy and the housing market. The index matched the last reading of 16 which suggests more time is needed before the ailing housing market improves.
Market Outlook- Rally Under Pressure
From our point of view, the market rally is under pressure which suggests caution is paramount at this stage. Looking forward, the next level of support for the major averages are their respective 50 DMA lines and resistance is their 2011 highs. The rally remains in tact as long as support holds. If you are looking for specific help navigating this market, please contact us for more information.