Stocks Slide on On Libya Woes
Tuesday, February 22, 2011
Stock Market Commentary:
Stocks fell on Tuesday as geopolitical woes continued in the Middle East. The current crisis in Libya intensified over the weekend. The benchmark S&P 500 is up 100% from its March 2009 low, and still about -14% off its all time high from October 2007. On average, market internals remain healthy as the major averages pull back towards their respective 50 DMA lines.
Libyan Woes Hurt Stocks
Stocks were closed in the U.S. on Monday in observance of President’s Day. Overseas, stocks fell as thousands of Libyan’s protested Muammar al-Gaddafi’s 40+ year reign. On Tuesday, stocks opened lower but stabilized as the day progressed. On the economic front, U.S. confidence rose in February to the highest level in three years as the global economy continues to recover. Elsewhere, the S&P Case-Shiller index showed home prices fell -0.4% on an adjusted month-to-month basis.
Market Action- Confirmed Rally; Week 26
It was encouraging to see the bulls show up and defend the major averages’ respective 50 DMA lines in November as this market proves resilient and simply refuses to go down. From our point of view, the market remains in a confirmed rally until those levels are breached. The tech-heavy Nasdaq composite and small-cap Russell 2000 indexes continue to lead evidenced by their shallow correction and strong recovery. However, it is important to note that stocks are a bit extended here and a pullback of some sort (back to the 50 DMA lines) would do wonders to restore the health of this bull market. If you are looking for specific high ranked ideas, please contact us for more information.
