Online Stock Trading | Stocks get the bottom dropped from underneath them, Bear trap or “THE” correction?

Stocks get the bottom dropped from underneath them, Bear trap or “THE” correction?


Filed Under Market Commentary |

Russell rebalance dominated the latter half of trading on Friday.  Although volume SOARED at the end of the day,  volume had been running much lower.  However, once mutual funds who track Russell Indicies were forced to reposition their funds to reflect the new consituents of the index.  What looked like a horrible day from the outside, when you get right down to it the day wasn’t all that bad.

GOOG and AAPL held up really well during Friday’s action.  If we were to see leaders such as GOOG and AAPL break on a day like Friday it would signal that the downside had more umph.  Taking a look at both GOOG and AAPL we’ll see they are still trending higher.

GOOG: GOOG.PNG

AAPL:  AAPL.PNG

 

Taking a look at the NASDAQ, volume was definitely a sore spot.  But, we know that late day volume from the Russell Rebalanced skewed Friday’s action.

NASDAQdaily.PNG

ASIA showed nice strength on Friday:

ASIA.PNG

Looking at the week coming on the economic front we find:

Date Time (ET) Statistic For Actual Briefing Forecast Market Expects Prior Revised From
Jun 25 10:00 AM Existing Home Sales May - 5.85M 6.00M 5.99M -
Jun 26 10:00 AM Consumer Confidence Jun - 105.5 106.0 108.0 -
Jun 26 10:00 AM New Home Sales May - 900K 925K 981K -
Jun 27 8:30 AM Durable Orders May - -2.0% -1.0% 0.8% -
Jun 27 10:30 AM Crude Inventories 06/22 - NA NA 6902K -
Jun 28 8:30 AM GDP-Final Q1 - 0.6% 0.8% 0.6% -
Jun 28 8:30 AM Chain Deflator-Final Q1 - 4.0% 4.0% 4.0% -
Jun 28 8:30 AM Initial Claims 06/23 - 315K NA 324K -
Jun 28 10:00 AM Help-Wanted Index May - 29 29 29 -
Jun 28 2:15 PM FOMC policy statement - - - - - -
Jun 29 8:30 AM Personal Income May - 0.6% 0.6% -0.1% -
Jun 29 8:30 AM Personal Spending May - 0.7% 0.7% 0.5% -
Jun 29 8:30 AM Core PCE Inflation May - 0.1% 0.2% 0.1% -
Jun 29 9:45 AM Chicago PMI Jun - 58.0 58.0 61.7 -
Jun 29 10:00 AM Construction Spending May - 0.2% 0.2% 0.1% -
Jun 29 10:00 AM Mich Sentiment-Rev. Jun - 83.7 84.0 83.7 -

***Special thanks to Yahoo, click here for more.

Thursday’s FOMC meeting should bring attention to more inflationary data as well as our beloved RATE hike/cut outlook.  Traders will most certainly be looking for anything to do with a possibility of a rate hike.  I’m indifferent about the interest rate outlook.  The FOMC will be happy that bonds sold off finally moving in the direction they were expecting.  This situation gives more cushion to the FOMC not to move on interest rates.  We will most like hear statements that will reflect “MARKET” condition allowing for self-correcting characteristics.

I would keep any new buys relatively small, nothing like an “all-in” moment.  Keeping losses small here is a wise decision and overtrading shouldn’t be practiced.  If you have had a streak of losers its best to keep yourself on the sideline and let this market work itself out.  After all, it is summer. 

Enjoy!

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