Date: Mon, 20 May 2013 19:52:20 +0200
- Trader Mike
STTG Market Recap Apr 26, 2013
Stocks finished off a big week in quiet fashion with a mild consolidation which is exactly what bulls wanted to work off a near term overbought condition. Quarterly GDP was released in the morning at 2.5% which was not too hold, nor too cold - but at this point any economic data can be explained away as a reason to buy stocks (good data is good, and bad data means more intervention by central bankers). There were a lot of interesting earning reports which we'll dive into later in the piece. For the day the S&P 500 finished down 0.18% and the NASDAQ 0.33%. For the week the S&P gained 1.74% and the NASDAQ 2.28% nearly erasing all of last week's losses.
The S&P 500 came back down to the bottom end of this 5+ month range it had been traveling; we have to see in the coming days how valid this trendline still is as it was violated last week. If it provides support go forward it remains useful.
Meanwhile the NASDAQ was rejected yesterday on the underside of the same channel.
For those interested in gold, the very oversold metal rallied to its quickly descending 20 day moving average today - where it was promptly rejected.
The housing sector was a star this week, confounding those who thought the chart looked weak and might be signaling a much larger correction.
We'll use Marketsmith charts for the remainder of today's recap - first we'll focus on Apple which MIGHT finally be turning the corner, and then 3 key companies who posted earnings yesterday and were hit hard. The relative strength rating is obviously horrid, but with the stock buyback announced, it will be key for this stock to get back over the 50 day moving average to change its trend. One can see this would also mean a new higher high which the stock has not done in a long time.
Finally we have 3 widely followed companies which reported earnings yesterday - to boos and hisses. Amazon.com (AMZN), Chinese search engine Baidu (BIDU), and travel site Expedia (EXPE).
Amazon fell nearly to its 200 day moving average down at 251 ; we can see this was mid March lows hence key.
Baidu was a market darling for a long time but has been very "Apple-like" the past 6 months. Yesterday was the first visit over the 50 day moving average (the same spot Apple has been stuck under for half a year) since the gap down reaction to the last earnings. Unfortunately anyone who front ran earnings got crushed today as the stock dropped from the lower $90s to mid $80s - again a key support for Baidu has been low to mid $80s.
Expedia is a widely followed stock but astute chart watchers would note it has been making LOWER highs since January - a bearish signal. That can change on a dime after earnings but usually the stock is trying to tell you something when it does that. Expedia fell to its 200 day moving average - you can see how important this line is for stocks.
Next week will be very data heavy with a Federal Reserve meeting (although nothing new is expected), and some of the key economic reports we receive each month such as ISM and employment. We'll see if bulls can make new highs or bears have any fight left in them after a beating all year.
Original post: STTG Market Recap Apr 26, 2013