Friday, May 27, 2011
AGAINST THE WIND
It was a repeat performance of the prior week, as the markets started out to the downside on Monday and spent the last four trading days trying to climb back. In the case of the S&P 500, it was aimless meandering within a narrow trading range as the index ended up giving back 2 points.
The entire month, the major indexes have been tiptoeing on a balance beam, and it appeared that at anytime the downside could come into play big time. It did not happen yet, but even Dr. Doom, Nouriel Roubini, chimed in with a similar tune in “Stocks teetering on ‘tipping point’ of correction.”
However, for May it looks as though the market will have its first down month since November. Economically speaking, there were no reports with any star power effect that could have moved the indexes; it was simply mediocre news, not enough to make a difference one way or the other.
Today’s figures reflected that going nowhere attitude as the dollar was lower, pending home sales dove, but consumer sentiment rose. Maybe the European debt crises has traders on edge as concerns about a Greek default remain headline news, while Ireland, Spain, Portugal and Belgium are on deck waiting for their turn in the dubious spotlight.
The small movement of our Trend Tracking Indexes (TTIs) reflected market sentiment, and we remain fairly close to last week’s numbers as far as distance to the long-term trend lines is concerned:
Domestic TTTI: +4.47% (last week +4.41%)
International TTI: +2.38% (last week +2.59%)
The markets will be closed on Monday for Memorial Day weekend after which will be facing a good sized menu of economic reports, including Consumer Confidence, Construction spending, Auto sales, Initial claims and Productivity, just to name a few.
The highlight will be Friday’s unemployment report, which may shed some light as to whether economic conditions are worsening or holding steady.
Have a pleasant Memorial Day weekend.
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