Friday left a mark. Sellers showed up with some force late in the day as the $SPX cascaded about 20 handles from about 2:30-PM to the close. The $DJIA dropped about 200 points over the same period….and fast. The Nazzy and Russell got whacked as well.
What is very disconcerting about all this, is that it came on the heels of a very bullsh PMI reading and the best consumer confidence reading since July 2007.
Things may get a little dicey going forward as the SPX broke the 1640 support level (1644 was the 20 day simple moving average support). This leads me to the idea that bad news is good for the market, not good news. The softer the economic data comes in, the better the chance is for the Fed to keep pumping. At least that’s the perception and perception is reality. Next Friday should be big, as we take a look at the May jobs data.
Technology did OK last week on a relative basis as $AAPL and $IBM traded well with the exception of Friday’s action as everything got sold off.
The $SPX is “betwixt and between”, as it now sits in between its 20 and 50 day moving averages, as well as the middle of some Fib levels. It should get interesting going forward and certainly not as easy to make money. A test lower lowers is certainly a possibility. We’ll see if dips keep getting bought.
Subscribers had a great month so come on by for a free trial. Have a great weekend.