Wall Street drops for fourth day as ECB stokes growth worries

The Dow started out over 300 points down this morning and stayed down most of the day rallying modestly at the end to close 200 points down.  As has been the trend the past several days, the sell off is attributed to continuing concerns over weakening global growth and that the market, after a very strong rally to open the year, is due for a breather and for profit-taking.  There also continues the concern over the S&P and the breaching of the 200-day MA, which today was lost, and the impending breach of the magic 2,800 level, which today is further away than ever.  But the day’s biggest news was the ECB deciding to hold off on rate hikes and offer banks a new round of cheap loans.  Is this good news for the EU, or does it suggest that things really are slowing down over there?  From my own perspective, we’ve seen this happen so many times in the past ten years that doom-saying is entirely premature.  Volume was a little above the 4-week average at 7.8 billion shares traded. 

Wall Street sinks for third day as healthcare, energy slump

The Dow was just a straight shot down today, though at its low point it was nearly 200 points down but closed at a minus 133, and we are once again being counseled that, in the absence of positive news to serve as a market catalyst, everyone’s taking a breather and taking profits.  In other words, the consensus seems to be that the the market is now priced correctly so stocks are no longer bargains.  That pesky S&P resistance level of 2,800 is also being closely watched by investors as, though the 200-day MA has been breached, the 2,800 level has not.  The Fed’s “Beige” report came out today but only said what we already knew: slowing global growth and the 35-day government shutdown have adversely impacted the economy.  GE also continues to have bad news.  At 7.3 billion shares traded, volume was in line with the 4-week average. 

Wall Street slips as GE swoons, key market level looms

A very choppy day swinging back and forth through a 175 point range but finally closing just about even, today’s drama is blamed on GE which took a nosedive of 4.7 percent upon reporting net cash outflows countering positive retailer earnings.  Investors are also waiting to see if the S&P can breach the critical 2,800 level of which it’s been skirting for several sessions.  Contrasting with GE’s bad news, Kohl’s and Target both issued good reports.  The one piece of very positive news is that single home sales rose to a 7-month high.  As the market lurks in this wait-and-see mode, volume was a little below average at 6.9 billion. 

Wall Street drops after weak data, healthcare slump

The market opened on great optimism jumping 130 points right out the gate, but then going into an immediate dive falling 450 points over the next few hours but then recovering more than half of that to close 206 down.  All last week I noted that investors were selling because “trade optimism” had already been priced in.  Then on Friday that seemed to reverse with yet another rally based on trade optimism.  But today we were right back to selling based on the optimism already being priced in.  Is it priced in or not?  Does it matter?  The market runs on perception and perceptions change hour by hour and day by day.  There was some weak data today but today’s expert says that the real reason for the sell off was the S&P reaching the key technical level of 2,800 in intraday trading today.  Volume was above average at 7.9 billion. 

Succinct Summation of Week’s Events 3.1.19 (plus Celebrating Fed Independence Day)

Below please find the usual weekly summation with the credit side registering a 2.6 rise in Q4 GDP and home sales up 4.6% m/o/m, way above the 1% forecast.  The debit side is the Korean talks ending in a bust and factory orders up only 0.1%, way below 0.6% forecast.  The bonus this Sunday night is a 16 minute NPR recording detailing how the Fed obtained its independence from the White House on March 4, 1951 and why that has been a very good thing as we celebrate the 68th anniversary.  Hope everyone had a great weekend.  One more frigid ahead, then maybe spring?

O'Neil's CAN SLIM Revised 3rd Edition Approach

As we enter a new month and with spring and an end to this long difficult winter right around the corner, I thought it fitting to share the most recent update to the IBD CAN SLIM investment strategy as outlined by AAII a couple weeks ago.  As IBD has been the subject of much discussion in the past, this article presents a very good summary of the method. Since O'Neil's classic book on the subject is a considerable read, it might be better to start here.  Enjoy the rest of this nice if frigid weekend.  Spring in just 18 days! 

Wall Street rises as trade optimism counters weak data

I noted yesterday that the trend this week has been retrenchment over trade optimism as the sentiment had become that it was already priced into the market.  Today that was already reversed as trade optimism has once again taken center stage and boosted the Dow over 230 points, though slowing factory activity in both the U.S. and China softened the session though it still closed over 110 up.  Of further note is that today the S&P closed above the benchmark 2,800 for the first time since November 8^th and the index has now closed just 4.2 percent under the September record high and is up 11.8 percent for the year.  So there was more good news than bad but enough bad to cut the early gains in half.  Volume was quite strong and quite a bit above average at over 7.9 billion.