Selling Continues On Wall St- 200 DMA Line Smacked
Tuesday, August 2, 2011
Stock Market Commentary:
Stocks were smacked on Tuesday after the Senate finally passed the debt bill. It was disconcerting to see all the major averages slice and close below their respective 50 & 200 DMA lines which suggests the bears are getting stronger. The technical action is ominous which bodes poorly for the near term outlook. Looking forward, the next level of support are the 2011 lows and the next level of resistance are the 2011 highs.
Senate Passes Debt Bill, Same Store Sales, & Personal Spending/Income Miss Estimates:
Stocks opened lower on Tuesday as investors across the globe were concerned that the global economic recovery may be in jeopardy. The International Council of Shopping Centers said its weekly measure of same store sales at major retail chains slid -0.3% on a weekly basis but rose +4% vs. the same period last year. Both measures fell short of the Street’s estimate for a gain of +0.3% and +4.2%, respectively. The Commerce Department said both spending and income were soft in June. Spending contracted -0.2% which missed estimates for a +0.1% gain. It was also the largest drop in spending since September 2009. The report also showed that personal income rose +0.1% which also missed estimates for a gain of +0.2%.
Market Outlook- Market In A Correction
The latest action in the major averages suggests the market is back in a correction as all the major averages are flirting with their respective 200 DMA lines. Our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. That said, the recent action suggests caution is paramount at this stage until all the major averages rally back towards their respective 2011 highs. If you are looking for specific help navigating this market, please contact us for more information.
