Markets had another rough time despite the "minor rally" at day's end. Dow declined 107, decliners ahead of advancers 3-2 and NAZ dropped 6, all on low volume of 1¼B shares. This was not a good performance for the bulls, it shows nothing was resolved. There were almost 500 new lows on NYSE, led by: C, BAC, GE, JPM, WM, F, PFE, WFC, AIG, MER, GM, MOT, AXP, PG. This small group of leaders contains 9 Dow stocks. Dow fell 1000 in Q1 & is down another 900 in Q2. For what it's worth, S&P500 held above 1270 all day, closing at 1278, down 5. Many say by classical definitions we are in a "bear market." My favorite Alerian MLP index was down 3 to 278.
Count on oil to bring ugly news. Oil settled at 140.21 after reaching almost 143. Adding to the woes of the markets, Moody's said it's likely to cut the credit ratings for Morgan Stanley (MS), one of the largest investment houses, MS stock was little changed.
This looks, feels & quacks like a bear market. An overdo rally from the oversold conditions is likely, but while economic news continues glum sellers will have the upper hand. AAA is forecasting reduced driving over the July 4 holiday weekend which will be a kick in the head for leisure companies. Travel & related activities will remain soft through the summer. This kind news reinforces the idea of doing homework to get ready for buying opportunities!
2 comments:
With all the news about being on the cusp of a bear market the market is facing a strong headwind on Monday. Inverse EFTs have worked well for me last week. People are talking about a bounce; I don't know.
John,
Sounds good, but I'm not into them. Instead I invest for the long term. With markets soooo oversold, a relief bounce is expected. But dreary economic news should carry markets lower!
Post a Comment