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Market Updates

Profit Taking Continues

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Once again most of the major indices and sector indices are trading in red but the selling still seems pretty mild. The Dow Jones Industrials is currently down 23 points to 8537 after bouncing from the 8487 level this morning. The NASDAQ Composite is down 7.5 points to 1499 after gapping lower and rebounding from its simple 10-dma. The S&P 500 also bounced from its simple 10-dma and is currently down 3.7 points to 925.

Market internals are currently negative and it feels like a repeat of yesterday's session. The NYSE reports 11 advancers for every 14 declining stocks. The NASDAQ is ringing up 10 advancing issues for every 15 decliners. New 52-week highs are not as robust as they have been with 156 on the NYSE and only 74 on the NASDAQ. It definitely smells like profit taking from recent gains. 52-week lows are still very low with 30 across both exchanges. Up volume is 188 million on the NYSE and 219 million on the NASDAQ. Down volume is 351 million and 382 million respectively.

Sector winners this morning are the OIX oil index, the OSX oil service index, the UTY utility index, the FPP forest and paper product index, the RLX retail index and the XAU gold and silver index. However, gains appear to be muted with only the XAU adding more than one percent thus far.

Leading sector losers are the XBD securities and broker dealers, down 1.5% and the BTK biotech index down 1.4%. Traders are also keeping their eyes on the BKX and BIX banking indices which have both pulled back to recent support-resistance levels.

In what could be a serious blow to the rally and the economy are signs that the U.S. consumer may be growing weary. April retail sales, while there were some bright spots like GPS, were mostly lower across the sector. Let me rephrase that...across the country same-store sales came in lower than expectations with the average gain coming in at 3.2%.

Another economic indicator weighing on the markets today is the jobless claims data this morning. The number of new claims actually dropped 25,000 to 425,000 last week, the lowest level in a month, but it did not prevent the four-week moving average from hitting a new one-year high of 446,000 claims. The weak labor market will continue to weigh on consumer spending and consumer confidence.

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