Tuesday, May 12, 2009

SP500 SPX SPY update 05/12/09 - Free Stock Market Analysis

Here is the latest trading and free market analysis video on the SP500 (SPX) and SPY ETF

5/12/09 16:35 ET Dow +50.34 at 8469.11, Nasdaq -15.32 at 1715.92, S&P -0.89 at 908.35:
[BRIEFING.COM] Profit takers sold early gains and sent the major indices markedly lower for most of the session, but stocks were able to battle back in the second half and finish in mixed fashion despite a lack of positive catalysts.

Out of favor for the second straight session, financials fell 1.8%. Financials were actually up more than 1% in the early going, but sellers pounced on the sector, focusing their efforts on regional banks (-5.6%) and diversified banks (-3.2%).

Bank of America (BAC 12.26, -0.68) was a primary laggard in the financial sector. Investors were unimpressed by news that the company is selling a partial stake in China Construction Bank for $7.3 billion to a consortium of buyers.

Bank of New York (BK 28.43, -1.12) also traded with weakness. It was the latest financial outfit to announce a secondary common stock offering.

Ford (F 5.01, -1.07) also fell out of favor after it announced a common stock offering that will raise funds for general purposes and help provide for certain union obligations, but the offering is also expected to dilute existing shareholders.

General Motors (GM 1.15, -0.29) was dogged as investors become increasingly concerned about whether the company will have a restructuring plan ready for government review by June. Yesterday GM's management indicated that it is more probable that GM will need to accomplish its goals through bankruptcy. Shares of the Dow component are at their lowest level in decades.

Fellow Dow component Microsoft (MSFT 19.89, +0.57) will issue $3.75 billion of senior unsecured notes to help fund working capital requirements, capital expenditures, or share repurchases. Microsoft was a primary leader among tech stocks (-0.6%), which actually underperformed the broader market.

Participants also rotated out of early cycle stocks in favor of defensive-oriented holdings. As such, industrials fell 1.2% and consumer discretionary stocks slid 2.2% as shares of retailers surrendered 0.9%. Retailers will come into sharper focus tomorrow, when the Advance April Retail Sales data is unveiled (8:30 AM ET).

Meanwhile, consumer staples stocks climbed 1.3%, health care advanced 1.4%, telecom tacked on 1.1%, and utilities closed 0.6% higher. Gold gained 1.1% to settle pit trading at $923.90 per ounce.

There weren't any major earnings announcements this session. In terms of economic data, the U.S. trade deficit widened to $27.6 billion in March, which is the first time in eight months that the deficit widened. However, the increase comes off of February's $26.1 billion deficit, which was the narrowest deficit since 1999.

Additionally, the March reading is an improvement from the first quarter average through February, so it should factor favorably into the revised first quarter GDP reading. The latter point aside, the March trade balance report serves as another reminder that global trade continues to contract as countries around the globe grapple with the effects of the financial crisis.

Short term strategy: SPX/SPY are trading lower for now it looks like the pattern may be changing here we are starting to see SPY put in lower highs and lower lows on the 30 minute chart for now. But we are in the 30 minute chart channel and as long as this bullish pattern continues we can continue to buy the dips and sell the rips. We are at the middle of the trading channel here so may see more downside here.

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

Also – Sorry! I had to edit my video, it was to long for YouTube.

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