16 May 2013 AMC

16 May 2013 AMC

Market Summary 

Market Internals

Leaders and Laggards

Technical Updates

Briefing's Commentaries 

Stock Market Update 16:10 ET Dow -42.47 at 15233.22, Nasdaq -6.37 at 3465.24, S&P -8.31 at 1650.47 :[BRIEFING.COM] The major averages settled in the red as the S&P 500 lost 0.5% while Nasdaq shed 0.2%.  The three indices hovered near their respective flat lines for the majority of the day before sellers emerged in the afternoon, and drove equities to their first loss in five days.  Nine of ten sectors ended in the red with technology as the lone standout. The sector gained 0.7% and contributed to the outperformance of the Nasdaq. Better-than-expected earnings from Cisco Systems (CSCO 23.89, +2.68), and the relative strength of large components like Apple (AAPL 434.58, +5.73) and IBM (IBM 204.69, +1.37) provided support for the sector.  While technology boosted the Nasdaq, the index was held back by the weakness of biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 180.23, -3.79) fell 2.1% to trim its week-to-date gain to 0.1%. Although the biotech ETF has been the subject of some profit taking following its recent run, it remains higher by 4.6% in May.  Biotechnology also weighed on the health care space, which was the weakest defensively-oriented sector, shedding 1.0%.  Overall, the discretionary sector was the biggest laggard as homebuilders and retailers underperformed. The SPDR S&P Homebuilders ETF (XHB 31.90, -0.54) lost 1.7% after the April housing starts report missed expectations. Meanwhile, the SPDR S&P Retail ETF (XRT 76.93, -0.84) slid 1.1% after Dow component Wal-Mart (WMT 78.50, -1.36) missed on earnings and revenue.  Also of note, the Dow Jones Transportation Average appeared strong in early action, but the bellwether complex declined through the afternoon before ending with a loss of 0.8%.  In the Treasury market, the 10-yr note received notable interest after today's disappointing economic data. As a result, the 10-yr yield declined six basis points to 1.877%.  The CBOE Volatility Index (VIX 13.25, +0.44) ended higher by 3.5%, suggesting downside protection received some interest.  Today's economic data was plentiful, and largely disappointing.  Housing starts fell 16.5% in April to 853,000 from a downwardly revised 1.021 million (from 1.036 million) in March. That was the smallest number of starts since November 2012. The Briefing.com consensus expected housing starts to fall to 970,000.  Multifamily construction, which tends to be highly volatile, fell to 243,000 in April from 398,000 in March. The drop is likely a reversion to the mean as multifamily construction has been running much hotter than its 12-month average.  The initial claims level jumped to 360,000, the highest level since February (excluding the volatility from the Easter holiday problems), for the week ending May 11 from an upwardly revised 328,000 (from 323,000) for the week ending May 4. The Briefing.com consensus expected the initial claims level to increase to 330,000.  The CPI fell 0.4% in April after declining 0.2% in March. The Briefing.com consensus expected consumer prices to fall 0.2%. Excluding food and energy, core CPI increased 0.1% for a second consecutive month. The consensus expected these prices to increase 0.2%.  The Philadelphia Fed's Business Outlook showed that manufacturing activity in the Philadelphia region contracted in May. The index fell to -5.2 from 1.3 in April. The Briefing.com consensus expected the Philly Fed Index to increase to 2.5.  Tomorrow, the preliminary May Michigan Consumer Sentiment Survey and April leading indicators will be reported at 9:55 ET and 10:00 ET, respectively. ..NYSE Adv/Dec 1191/1827. ..NASDAQ Adv/Dec 1065/1418.

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Jason's Commentaries


I was right last night! Market finally got a down day after 2 weeks... As what I said... bulls are on steroids.. worse of all, unemployment claims and philly fed underperformed but the market merely retraced by 42 points on the Dow. This clearly shows the strength of the bulls. I reckon without much catalyst, I highly doubt the market is going to retrace further. Volumes were decent last night, at 684m shares traded on the NYSE, bears outpaced bulls by approx 2:1. Not exactly a down day. 

On the technical updates, while we're on the uptrend, all 3 indices are showing a bearish harami formation, we'll need to wait for one more candle to determine whether this harami would work. While we're in the mid May already, there might be some chance where the market might still sell off. 

Anyway guys, keep your stops tight as the market is really getting funky.   

Market Call: FLAT to upside(less than 0.5% gain)

Date: 17 May 2013