Friday, February 5, 2010
Stocks got smacked for the fourth consecutive week as the dollar rallied and fears spread that the economic recovery may slow. During that period, volume patterns have turned bearish on the NYSE and Nasdaq exchange which suggests large institutions are aggressively selling stocks. Decliners steadily lead advancers which is another disconcerting sign. It is also worrisome to see the number of new 52-week highs continue to shrink as the number of new lows continues to expand.
Monday & Tuesday:
Stocks rallied on Monday continuing the recent string of a strong start to the week before the bears show up and send stocks lower by Friday. Stocks rallied on strong manufacturing reports from the US, Europe, and China. The Institute for Supply Management said that US manufacturing enjoyed its largest gain since August 2004 which was a welcomed sign. On Tuesday, stocks and commodities rallied as the dollar fell after healthy news from the ailing housing front was released and the Australian central bank unexpectedly left interest rates steady.