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Stock Market Experiences A Bit of May Selling

Stock-Markets / Stock Markets 2014 May 07, 2014 - 09:36 AM GMT

By: PhilStockWorld

Stock-Markets

Courtesy of Doug Short: Tuesday was a light day for economic news. The trade balance for March was down slightly more than expected, but not enough to contribute significantly to the Second Estimate of Q1 GDP. The S&P 500 opened fractionally lower and sold off to about the 1876 level, which provided support until after the lunch hour. It then sold off to a lower level and accelerated its losses in the final 20 minutes. The index closed at it -0.90% intraday low.

The popular press (e.g., Bloomberg and CNBC), always eager to explain the market, attributed today’s bad mood to AIG’s weak earnings, its stock losing 4.14%, and Twitter, its stock plunging 17.81% after a lockup expiration.


The yield on the 10-year note finished at 2.61%, down 2 bps from Monday’s close and 1 bp off the 1014 low. The 10-year yield is well off its 3.04% close at the end of 2013.

Here is a snapshot last five sessions.

Here’s a daily chart of S&P 500. Volume remains below average, but up from yesterday positive trade. The last two sessions lows are just a few points above the 50-day moving average of price.

A Perspective on Drawdowns

The chart below uses the percent-off-high strategy for illustrating the drawdowns greater than 5% since the trough in 2009.

The S&P 500 is now up 1.05% for 2014 and 1.32% off its April 2nd record close.

Here is a longer perspective, starting with the all-time high prior to the Great Recession.

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

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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)

© 2014 Copyright  PhilStockWorld - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

PhilStockWorld Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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