by Sam Collins | March 19, 2013 2:51 am
Euro zone financial troubles surfaced again after months of apparent stability. The tiny island of Cyprus was the cause of angst as the major powers attempted to rush a bailout plan into action before the risk of “contagion” became a possibility.
At the thought of another looming banking crisis, the financial sector took a hit Monday, leading the blue chips lower. Other stocks held until the afternoon when talk of a parliamentary session for today was postponed, and the imposition of a deposit tax was being considered. In the United States, homebuilders’ confidence fell more than expected for the second month in a row.
At the close, the Dow Jones Industrial Average was off 62 points at 14,452, the S&P 500 fell 9 points to 1,552, and the Nasdaq dropped 11 points to 3,238. The NYSE traded 676 million shares and the Nasdaq crossed 365 million. Decliners outpaced advancers on both exchanges by about 1.6-to-1.
The Nasdaq is trading in a broad bull channel with a top at about 3,260 and support at just above 3,150. Within the channel, the immediate support is from 3,197 (the September high) to 3,213, the February high. The next support is at the 50-day moving average at 3,168.
For those who prefer the Fibonacci method of support lines, as illustrated in Monday’s Daily Market Outlook for the S&P 500, the following calculations apply to the Nasdaq: Measured from the February low at 3,105 to the March high of 3,261, a 38.2% retracement is at 3,201, 50% is 3,183, and 61.8% is 3,164.
Conclusion: Despite a recurrence of European contagion woes on this side of “the pond,” we are blessed with a very powerful bull market. All trends point higher and pullbacks should be used as buying opportunities.
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.
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