by Sam Collins | August 30, 2013 2:44 am
On Thursday, stocks eked out modest gains following a late-day upward revision of Q2 GDP to 2.5% from 1.7%. However, after the close, economists warned that the entire gain came from a stronger-than-originally reported trade deficit. This deficit is likely, they say, to be reversed in Q3.
Military action against Syria appeared less likely following a rejection by the British parliament. But the U.S. continued to press foreign leaders to take action.
Telecom stocks led other sectors in the S&P 500 following Verizon’s (VZ) announcement of a possible acquisition of Vodafone’s stake in Verizon Wireless in what is termed “the second biggest deal of all time,” according to The Wall Street Journal.
At Thursday’s close, the Dow Jones Industrial Average was up 16 points to 14,841, the S&P 500 rose 3 points at 1,638, and the Nasdaq gained 27 points at 3,620. The NYSE traded 546 million shares and the Nasdaq crossed 320 million. Advancers led decliners on the Big Board by 1.7-to-1 and on the Nasdaq by 2.5-to-1.
The S&P 500 is in an intermediate and near-term downtrend. The tepid bounces of Wednesday and Thursday pale in comparison to the 6-to-1 negative breadth of Tuesday’s sell-off. To make matters worse, the S&P 500 sliced through its 50-day moving average with ease, leaving behind what appears to be a small downside breakaway gap.
Conclusion: The intermediate-term trend of the stock market is down despite some pockets of success like the biotech sector. The S&P 500 is the most-watched index for technicians since its makeup spans a wide spectrum of industries and businesses. And so far, it has failed to make even a small effort to regain the important inflection point at the 50-day moving average, now at 1,660.
However, the long-term trend is still up, as readers will see when I publish the 17-month moving average chart next week. But until this important index closes above its 50-day moving average, we must consider feeble attempts at rallies as nothing more than dead cat bounces.
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.
Source URL: http://investorplace.com/2013/08/daily-stock-market-news-rally-attempts-should-be-considered-dead-cat-bounces/
Short URL: http://invstplc.com/1nB3WmE
Copyright ©2014 InvestorPlace Media, LLC. All rights reserved. 700 Indian Springs Drive, Lancaster, PA 17601.