Similar Posts

  • Dow Jones Industrial Average Violates 50 DMA line

    Monday, April 09, 2012 Stock Market Commentary: Stocks and other risk assets fell on Monday in the wake of Friday’s disappointing jobs report and after inflation topped estimates in China. Technically, this long overdue correction is upon us and the key going forward is to measure the health of this pullback. Ideally, one would like…

  • Stocks Drift Lower After Blasé G-20 Meeting

    Technically, the fact that the Dow Jones Industrial Average, S&P 500, Nasdaq Composite and NYSE Composite all closed below their respective 200-day moving average (DMA) lines last week which bodes poorly for the current rally. Additionally, this unanimously ominous action suggests the market may retest its recent lows. Looking forward, the 50 DMA line may act as stubborn resistance and this month’s lows should act as support. Since the June 15, 2010 follow-through day (FTD), this column has steadily noted the importance of remaining very selective and disciplined because all of the major averages are still trading below their downward sloping 50-day moving average (DMA) lines. It is also worrisome to see the 50 DMA line already slice below the 200 DMA line on the NYSE. This event is known by market technicians as a death cross and usually has bearish implications. Trade accordingly.

  • Week In Review: Leaders Get Hit As Market Churns

    Initially, the market rallied on the jobs report but sellers quickly emerged which put pressure on the market. It was disconcerting to see a several high profile leaders such as Apple Inc. (AAPL -1.61%) and Netflix (NFLX -3.04%) get smacked on Friday. Apple, one the strongest stocks since the March lows, triggered a technical sell signal when it violated its well defined 8-month upward trendline and its 50 DMA line on Friday. This was the first time since the March low that Apple closed below support (its upward trendline and 50 DMA line). Volume surged as the stocks fell which indicated that large institutional investors were unloading their positions, not Aunt Mary or Uncle Bob. The dollar rallied sharply after the jobs report was released which put pressure on a slew of commodities, mainly gold. Gold plunged sharply today which dragged a slew of gold related stocks. Remember that gold has been one of the strongest performing groups in recent weeks and now that it has fallen, a new group will need to emerge to carry this market higher. That coupled with the recent questionable action in the major averages and the dearth of leadership suggests this rally is “under pressure” which means caution is advised.

  • Stocks Tank On Contagion Woes

    Over the past two weeks, this column has consistently mentioned that the major averages have been steadily rallying since early February and a pullback of some sort should be expected. Furthermore, we mentioned that the current rally was under pressure due to the disturbing number of distribution days that emerged in recent weeks. So, we hope that Tuesday’s sell off (and any further downside action in the near term) should not take any of you by surprise. Trade accordingly.