Wednesday, May 20, 2009

Free Stock Market Analysis - Update 05/20/09 - SPY SPX

Here is the latest trading and free market analysis video on the S&P500 (SPX), SPY, ETFs...

Summery: Short term strategy: SPX/SPY is trading lower and looks like the pattern may be changing here, we are starting to see SPX/SPY consolidate here between 93.00 and 90.00. We are now below the lower end of the channel on the 30 minute chart, but just above the 5 day ma and 200ma, this may be a good support area and good place to go long with a tight STOP here or buy a protective PUT for insurance to the down side, or limit your risk by buying a bull call spread instead.

Patterns: Short term: Bearish, Intermediate term: Neutral, Long term: Bullish.

5/20/09 16:15 ET Dow -52.81 at 8422.04, Nasdaq -6.70 at 1727.84, S&P -4.66 at 903.47: [BRIEFING.COM] Recovering from losses last week, a bullish bias has supported buying in recent sessions, which helped participants begin Wednesday with strong gains. The upbeat tone was supported by continuing gains among commodities and an early advance by financial stocks. However, stocks began drifting lower midway through the session and ultimately closed with a loss as participants turned against financials.

Early gains were helped along by investors that chased commodities and materials stocks, which have benefited from the assumption that stronger economic conditions in the back half of the year will rekindle commodity demand. A weaker dollar has also helped bolster commodity prices.

The minutes from the April FOMC meeting indicated that participants project a contraction for real GDP this year, and that committee members believe the near-term economic outlook has weakened relative to the projections made in January. However, but a recovery in sales and production is still expected to begin in the second half of this year.

With the dollar dropping more than 1% against a basket of major foreign currencies, gold prices advanced 1.2% to settle pit trading at seven-week high of $937.40 per ounce. Gold stocks like Newmont Mining (NEM 45.55, +1.98) provided leadership to the materials sector (0.5%), which had spent most of the session trading with gains exceeding 2%. Meanwhile, metals and mining stocks climbed 1.0%.

Oil prices built on the prior session's advance to register fresh six-month intraday highs and closing highs. The advance was helped along by bullish inventory data, which showed a 2.1 million barrel draw for the week ending May 15 while a draw of 400,000 barrels was expected. Crude contracts settled more than 3% higher just above $62 per barrel.

Financials proved to be a weak link during the session. The financial sector spiked to a near 3% gain in the early going, helping drive the broader market higher, but the move ultimately collapsed. Financial stocks closed the session with a 2.4% loss.

Though Bank of America (BAC 11.50, +0.25) showed strength after announcing that it raised $13.5 billion through a previously announced share offering following government stress tests, banks were among the sectors weakest performers. The KBW Banking Index slid 2.8%.

Consumer finance companies (-3.5%) also showed considerable weakness amid continued concern that new rules are in order for credit card companies. Following the Senate's approval yesterday, the House of Representatives approved a bill imposing changes for the credit card industry.

Retailers had a seesaw session, which saw the sector trade with a 3.0% gain before settling with a 1.6% loss. Despite the disappointing finish, Target (TGT 42.95, +1.01) still logged an impressive gain following better-than-expected earnings.

Dow component Hewlett-Packard (HPQ 34.63, -1.95) generated in-line earnings for its latest quarter and issued an in-line forecast for the current quarter. The company's upside outlook for fiscal 2009 wasn't enough to win it favor, though. The stock traded as a laggard among tech issues (-0.7%).

Nasdaq -6.70 at 1727.84... NYSE Adv/Dec 1591/1452... Nasdaq Adv/Dec 1239/1453.

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