Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
In the wake of a close near the lows of the day in the prior trading session, there would not seem to be a sign that a major recovery is in the cards today. In fact, we suspect that the majority of the initial gains this morning are the result of simple technical balancing from a compacted oversold condition and not because of improving fundamentals. Apparently the Germans continue to see internal turmoil on the aid package to Greece and that in turn has allowed imaginations run wild on a possible domino effect slide of debt problems throughout the Euro zone. While the overnight headline flow didn’t seem to contain any fresh bombshells, investors are still very much on edge about the whole situation. In fact, the market didn’t seem to care that Euro zone Service sector PMI readings overnight came in at the highest level since October 2007 and we suspect that the US markets won’t be cheered much by news of an improvement in a private US jobs survey. In other words, the market currently thinks that evidence of growth is positive, but with the Euro zone debt situation potentially capable of derailing growth, it is clear that the bull camp has been rocked backward on its heels. There might be a temporary technical bounce but one can hardly expect an all clear on the Euro zone debt situation.
S&P 500: There wasn’t a big range down reversal signal yesterday in the wake of the hard down washout move. However, the S&P might be capable of an initial bounce today but lingering Euro zone debt fears look to continue to gloss over favorable economic data flows. We would peg initial resistance at 1176.80 today but the failure to hold above 1171.10 in the June S&P, would seem to put control of the market right back in the hands of the bear camp.
DOW: It isn’t surprising to see the June Mini Dow manage a slight technical bounce today, as the downside action in the prior trading session certainly left the market over extended. However, even with some Dow stocks attempting to hold up yesterday morning, it was clear that broad based negative sentiment was simply too much for even the big cap stocks. We see a very critical support point on the charts today at 10,848 and the inability to hold that level could rekindle widespread anxiety again. The inability to benefit from talk of a possible Goldman settlement with the SEC and the lack of lift off favorable UBS earnings overnight highlights this markets lack of interest on potential positives!
NASDAQ: As in the Mini Dow, the Nasdaq is showing some technical bounce this morning, but one doesn’t get the impression that an all clear has been seen on the big picture negatives facing the markets. With the Nasdaq potentially more overbought than other sectors of the market, that could mean that the Nasdaq could be the last sector of the market to become oversold. Therefore after a minor short covering bounce this morning, traders should probably prepare for a resumption of the downside bias, as the Euro zone debt situation appears to have a shelf life. Critical pivot point support in the June Nasdaq is seen at 1962.25 this morning, with potentially solid resistance seen up at 1975.00.
TODAY’S MARKET IDEAS: The bear camp retains overall control even if the US market shows some upside action this morning.
Stock Market Commentary – 2010.05.05
by Dave Hightower on May 5, 2010
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
In the wake of a close near the lows of the day in the prior trading session, there would not seem to be a sign that a major recovery is in the cards today. In fact, we suspect that the majority of the initial gains this morning are the result of simple technical balancing from a compacted oversold condition and not because of improving fundamentals. Apparently the Germans continue to see internal turmoil on the aid package to Greece and that in turn has allowed imaginations run wild on a possible domino effect slide of debt problems throughout the Euro zone. While the overnight headline flow didn’t seem to contain any fresh bombshells, investors are still very much on edge about the whole situation. In fact, the market didn’t seem to care that Euro zone Service sector PMI readings overnight came in at the highest level since October 2007 and we suspect that the US markets won’t be cheered much by news of an improvement in a private US jobs survey. In other words, the market currently thinks that evidence of growth is positive, but with the Euro zone debt situation potentially capable of derailing growth, it is clear that the bull camp has been rocked backward on its heels. There might be a temporary technical bounce but one can hardly expect an all clear on the Euro zone debt situation.
S&P 500: There wasn’t a big range down reversal signal yesterday in the wake of the hard down washout move. However, the S&P might be capable of an initial bounce today but lingering Euro zone debt fears look to continue to gloss over favorable economic data flows. We would peg initial resistance at 1176.80 today but the failure to hold above 1171.10 in the June S&P, would seem to put control of the market right back in the hands of the bear camp.
DOW: It isn’t surprising to see the June Mini Dow manage a slight technical bounce today, as the downside action in the prior trading session certainly left the market over extended. However, even with some Dow stocks attempting to hold up yesterday morning, it was clear that broad based negative sentiment was simply too much for even the big cap stocks. We see a very critical support point on the charts today at 10,848 and the inability to hold that level could rekindle widespread anxiety again. The inability to benefit from talk of a possible Goldman settlement with the SEC and the lack of lift off favorable UBS earnings overnight highlights this markets lack of interest on potential positives!
NASDAQ: As in the Mini Dow, the Nasdaq is showing some technical bounce this morning, but one doesn’t get the impression that an all clear has been seen on the big picture negatives facing the markets. With the Nasdaq potentially more overbought than other sectors of the market, that could mean that the Nasdaq could be the last sector of the market to become oversold. Therefore after a minor short covering bounce this morning, traders should probably prepare for a resumption of the downside bias, as the Euro zone debt situation appears to have a shelf life. Critical pivot point support in the June Nasdaq is seen at 1962.25 this morning, with potentially solid resistance seen up at 1975.00.
TODAY’S MARKET IDEAS: The bear camp retains overall control even if the US market shows some upside action this morning.
Tags: DOW, NASDAQ, S&P 500, Stocks
About Dave Hightower