Buyers Need to Get a Move On…

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After opening lower on Thursday, stocks rose steadily, boosted by news that a Saudi Arabia-led coalition of forces from 10 countries had attacked rebel forces in Yemen. But the market’s advance was not sustained, and the major indices closed modestly lower.

At its lowest point, the iShares NASDAQ Biotechnology Index (ETF) (NASDAQ:IBB) fell to its 50-day moving average but rallied late in the session to close down just 0.1%. It is down 7% so far this week.

The tech-heavy Nasdaq 100 (see my Trade of the Day) was down more than 1% at its low, but closed off by a small margin.

European stocks fell with Germany’s DAX losing 0.2% and France’s CAC 40 down 0.3%. The recent crash of a Germanwings airplane with 150 people on board and a new war in the Middle East were blamed for the declines.

SanDisk Corporation (NASDAQ:SNDK) fell 18.5% following a cut in its revenue outlook for this year. Management blamed lower sales of enterprise products and pricing pressures. Lululemon Athletica inc. (NASDAQ:LULU) rose 4.9% after reporting better-than-expected earnings.

Gold futures gained 0.7% to $1,205.10 an ounce. Oil rose 4.5% to $51.43 a barrel, a three-week high. U.S. Treasury bonds sold off, driving yields on the 10-year note to 2.01%. Analysts attributed the decline in bond prices to a better U.S. labor market report, which could result in the Federal Reserve increasing interest rates earlier than previously anticipated.

At Thursday’s close, the Dow Jones Industrial Average fell 40 points to 17,678, the S&P 500 lost 5 points at 2,056, the Nasdaq was down 13 points at 4,863, and the Russell 2000 lost 2 points at 1,232.

The NYSE’s primary market traded 828 million shares with total volume of 3.5 billion. The Nasdaq crossed 2 billion shares. On the Big Board, decliners outpaced advancers by 1.6-to-1, and on the Nasdaq, decliners led by 1.2-to-1.

MDY Chart
Click to Enlarge

Chart Key

There are many charts that we could study today, but none quite so revealing as the SPDR S&P MidCap 400 ETF (NYSEARCA:MDY).

MDY took a beating on Wednesday, falling nearly 2%. We could have dismissed that as just another midweek adjustment if the ETF had rallied on Thursday. Instead MDY fell again, and the intraday low at $271.57 was just over a point from the 50-day moving average at $270.51.

The increase in volume was also troubling, especially if buyers fail to step in. High-volume breakouts that fail to be confirmed by a follow-through break to another new high sometimes result in a selling climax.

Conclusion

With a new war in the Middle East, Q2 earnings expected to be negative, Q3 earnings in doubt, a pending interest rate hike, a strong U.S. dollar and a prowling Putin, there is enough bad news around to sink any market. So the amazing thing is that stocks are still in a bull market.

But if the quarter ends at a loss for all three major indices (Dow, S&P 500 and Nasdaq), it will be the first time in six years that this has occurred. And, according to CNBC, this phenomenon has occurred only four times in the past 20 years.

Perhaps buyers will emerge to stem the near-term decline. However, they have just three more trading days to appear or we may be locked into a negative intermediate trend as we enter the second quarter of 2015.

Today’s Trading Landscape

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.


Article printed from InvestorPlace Media, https://investorplace.com/2015/03/daily-market-outlook-buyers-need-to-get-a-move-on/.

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