Join        Login             Stock Quote

Stock Market Opening Report - May 31 2012

 May 31, 2012 06:59 AM

(By Rich Bieglmeier) So much for that feel good post Memorial Day rally. Wednesday followed through with a thud. It sure appeared as the equity indexes were going to make a run for their breakdown borders, but Spain's woes became Wall Street's oh no.

The thing we have to watch now is where does the selloff pivot, and how high it runs afterwards. A downdraft that takes the NASDAQ, Dow, and S&P to closes below May 18th's lows of 2,778, 12,369.38, and 1,295, respectively, would confirm the downtrend.

On the other hand, if the slide stops higher than the mid-May bottom, and the threesome rally beyond their Tuesday closes, then the outline of a new uptrend could start to take form.

[Related -Automating Ourselves To Unemployment]

iStock can see the indexes possibly moving a maximum of two standard deviations below their 20-day averages. That would put the NASDAQ at 2757, the Dow at 12,182 and the S&P at 1282. Any lower than that and the Spanish stuff really hit the fan; although, that doesn't seem so farfetched.

With Tuesday's gains wiped clean by Wednesday's losses, iStock's momentum model shows down arrows on every level. Down, Down, Down, usually means stocks aren't going to regroup right away, and more red tape is coming.

The really scary part is that NONE of our under bought measuring sticks is anywhere near a bottom reading. The indexes' relative strength readings have plenty of room to drop, VIX is at 24.14, when iStock looks a fear reading closer to 35, and more than 1,000 NYSE listed stocks need to move below their 10-day moving averages before pound the table buy signals start pounding tables.

[Related -Fed: Waiting For June… Or Godot?]

The next two days of economic news will give Wall Street all the weight or lift it needs to pick a direction. The street expects Jobless Claims to remain static at 370,000, the ADP Jobs report to show a gain of 154,000, and first quarter GDP to be revised down to 1.9% from its initial reading of 2.2%.

Unless GDP comes in way under 1.9%, the ADP report will likely get the most attention as a precursor to Friday's Employment Situation report. iStock believes a miss to the downside could be in store for both the ADP and Employment Situation announcements.

Intuit Inc. reported that small business hiring slowed to 40,000 in May, following an advance of 60,000 jobs in April. The fall off is not an encouraging sign. We hope that we are wrong, but a substantial jobs disappointment might be all it takes to test our pivot point and 2 standard deviations of downside notions.

We will have more on Friday's ISM Manufacturing Report and Personal Income & Outlays in tomorrow's market brief.



Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageAutomating Ourselves To Unemployment

In this current era of central planning, malincentives abound. We raced to frack as fast we could for the read on...

article imageFed: Waiting For June… Or Godot?

The Federal Reserve left interest rates unchanged yesterday, as widely expected. But the possibility of a read on...

article imageThe Single Best Place To Invest Your Money For Retirement

It was never supposed to be this daunting. At least that's what we were read on...

article imageNegative Blowback From Negative Interest Rates

The Federal Reserve is widely expected to leave interest rates unchanged today. But perhaps standing pat read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.