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Daily
Editorial: |
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Market Continues to Feel Selling Pressure
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Good
morning! The market attempted to stabilize heading into Tuesday morning
following the last two weeks of selling. The day began with a modest
upside gap, but ran into resistance early on from prior highs at the
end of last week in the S&P 500 and the closure of Monday's gap in
the Nasdaq Composite. The intraday action in the indices was very
choppy and the volume in the market was noticeably less than recent
mornings. It continued to drop off as the day progressed and the range
of the first hour of the day began to narrow.
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The selling within the range heading into the
early afternoon was a lot more gradual overall than the upside. When
the 13:00 ET reversal period hit at the 15 minute 20 simple moving
average support, the market saw a brief upside reaction. The move
maintained an average
pace and was
unable to penetrate morning price resistance, making it easier for the indices to pull back again into
14:00
ET. This time the 15 minute 20 sma broke and when the market hit the
lows of the intraday range they reacted only briefly to the support
before breaking to new intraday lows.
This late day breakdown in the indices first
found support with the 15:00 ET reversal period as the Nasdaq closed
its morning gap and the S&P 500 hit its 5 minute 200 sma support.
Nevertheless, the volume was not strong enough to create an exhaustion
move on the 15 minute charts. The indices pulled higher until hitting
the 5 minute 20 sma resistance and then the bottom dropped out,
creating another one of the rapid flushes I warned about in yesterday's
column that has been increasing the risk for the bulls lately.
The market
closed within a few ticks of the low of the day as all three indices
again posted a lower close. The Dow lost 26.98 points (-0.2%) on the
day, while the S&P 500 fell 5.49 points (-0.4%). The Nasdaq
Composite saw the largest percentage decline, closing lower by 14.10
points (0.6%). A few sectors still managed to have a decent day. Gold
stocks in particular did very well, ending the day with a 2.9% gain.
Energy and oil services also posted gains, although most of this was
due to a large morning gap.
Not much has changed as fast as my market bias since yesterday. The
market is showing a lot more overlap from day to day as it has
corrected in this support zone, but we are not seeing much for buy
patterns develop yet. Again, even when we do on the intraday time
frames, unless the market really rounds off at the daily lows, then we
are more likely to see a choppier continuation of the correction
anyway.
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Economic
Reports and
Events
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May 24: Durable Orders for
April (8:30 am), New Home Sales for April (10:00 am), Crude Inventories
5/19 (10:30 am)
May 25: Chain Deflator-Prel.
for Q1 (8:30 am), GDP-Prel. for Q1 (8:30 am), Initial Claims 5/20 (8:30
am), Existing Home Sales for April (10:00 am), Help-Wanted Index for
April (10:00 am)
May 26: Personal Income and
Personal Spending for April (8:30 am), Michigan Sentiment-Rev. for May
(9:50 am)
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Earnings
Announcements of Interest: |
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Only stocks with an
average daily volume of 500K+ are
listed. List may not be complete so be sure to always check your
stock's earnings date before holding a position overnight. (A) =
Earnings after the close, (B) = Earnings before the open,
(?) = Earnings time not specified at the time of this writing
May 24: AZO (B), CWTR (A), DLTR
(B), JLG (A), MIK (?), NTAP (A), PSS
(B), SPI (?), TIVO (A), WSM (B)
May 25: BLI (?), CHS (A), CMOS (?), JOYG (B), PDCO (B), PDC (B), PLMD
(B), SAFM (B)
May 26: CBRL (B)
Note: All economic numbers
and earnings reports are in lines with those compiled by Yahoo Finance.
Occasionally changes will occur that are made after the posting of this
column.
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