Stock Market Four Day Losing Streak Ends

By: PhilStockWorld

Courtesy of Doug Short: When the US stock exchange opened, world markets were a mixed bag. The Nikkei and Shanghai Composite had both closed with 1.6% losses, but the EURO STOXX 50 was up 1.7% on Markit’s strong Flash Eurozone Composite Purchasing Managers’ Index (PMI). The US followed the EU exemplar with an Industrial Production increase that substantially exceeded expectations. The S&P 500 rallied at the open and hit its 0.95% intraday high at 10 AM. The index then coasted to a trimmed gain of 0.63% for the day, snapping a four-day losing streak.

The big news this week will be the outcome of the two-day FOMC meeting that starts tomorrow.

Here is a 15-minute look at the last five sessions. On Friday I highlighted what appeared to be some near-term consolidation. Today we got a welcome, if somewhat restrained, advance.

Volume on the SPY ETF, which is probably a better investor sentiment indicator than index volume, certainly underscores the notion of restraint. Volume was light on today’s inverted hammer, as investors await the Fed’s pleasure.

The S&P 500 is now up 25.27% for 2013 and 1.21% below the all-time closing high of December 9.

For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.

- Phil

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

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