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A Stumble, Then Recovery May 20, 2016

Posted by Tom in Thoughts.
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May 20, 2016 – Really, not much happened this week in the stock market.  We saw a stumble mid-week on fears of an interest rate hike in June by the (US) Federal Reserve; that brought the markets down.  The rest of the week made a recovery, at the end, not much really happened.  My “red line in the sand” at 4684 on the NASDAQ was tested but held.  I just keep going back to my later comment that the market is suffering from “Lack Of Demand” more than anything else.

NASDAQ

This wait and see perspective may just place us in the continuing broad trading range.  The trend and sentiment are showing “bearishness”, though those reading are not a strong as they were a few weeks ago.  The pie chart below shows the overall price strength of all of the stocks in the very broad S&P 1500 Index.

Price Strength

Pretty non committal right now.  Corporate earnings were generally all over the map, but rather disappointing in general.  The consumer is not spending much and there seems to be little reasons to just buy stocks right now.  Is Summer coming early to the stock market?  It seems that way.  The chart below shows the industry sectors of stocks passing my candidate scans.

Candidate sectors

Software, Construction Materials, Oil & Gas and Real Estate are my lead sectors.  Perhaps the Software & Oil & Gas areas are making a bid to come back?  I’ll keep an eye on them, but for now not much is catching my eye.  I remain “hedged out” on the stocks that I hold.  My concern is that a little bad news could send this weak market a bunch lower.  What is need to break out (upwards) is some sustainable good economic news of the world.  Until then no one appears to be wanting to jump in either direction.

Have a good week.    ……….  Tom  ………..

price chart by MetaStock; pie charts by http://www.HighGrowthStock.com; used with permission.

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