In the face of a week full of government actions and lousy economic reports the markets responded by dropping like a rock. Major averages finished the week down between 4% and 5%. The S&P 500 finally closed below its November low, just as the Dow did a week ago. This is not a good thing, especially since the NASDAQ and the Russell 2000 are getting close to their lows, as well.
Again, the government was at the center of a number of market-moving news items. The Treasury took a larger stake in Citi by converting preferred stock to common stock and providing Citi a boost in its measure of tangible common equity. Bank stress tests were announced and apparently 19 of the biggest banks will be evaluated over the next couple of months. The new administration's budget plan was revealed and health care companies, especially those in the managed care sector, plunged in response. The budget also suggested college students should borrow directly from the government so student loan lenders and some of the for-profit schools tanked. On Tuesday, Ben Bernanke delivered his semi-annual briefing to Congress and his tone was up-beat enough to allow the market to rebound from Monday's big loss.
There were a number of high profile dividend reductions from the likes of General Electric and JPMorgan-Chase and it is adding to the sense that too many companies are cutting dividends lately.
Then there were economic reports that only served to put further pressure on stocks: 4Q2008 GDP at -6.2% was down more than anyone expected. All kinds of housing data was down more than expected: house prices, existing home sales, new home sales all hitting multi-decade lows. The Durable Goods report for January was down more than expected and December was revised significantly downward. The picture this painted of manufacturing contributed to the 8% slide in the industrial sector this week.
The negativity in market action took its toll on our TradeRadar statistics and our charts are not particulary encouraging. Read on for the gory details...
TradeRadar Alert HQ Stock Market Statistics --
Each week our
Alert HQ process scans over 7400 stocks and ETFs and records their technical characteristics. Primarily we look for BUY and SELL signals for our
free stock alerts; however, we also summarize the data in order to gain insights in the week's market action. The following charts are based on daily data and present the state of some of our technical indicators.
This first chart presents the moving average analysis for the entire market and contrasts it with the performance of the S&P 500 SPDR (SPY).
