Sovereign debt issues in Europe continue to dominate the headlines as fresh worries over the fiscal health of Italy rattled the markets Monday. What’s more, concerns domestically with our own debt issues has also been gaining more attention lately and an agreement has not even rhetorically been discussed. With a poor jobs report last week, these issues are all coming together front and center.
As bad as the headlines may appear the truth is is that the market has pulled back the last two days for the simple fact it had rallied over 6% in two weeks before that. Often when markets are moving up and down, the talking heads on the media will try to explain why they are doing so. However, we contribute these last two days to nothing more than profit taking as the market rose dramatically in a very short period of time and was vulnerable to a sharp correction.
We continue to follow leaders and laggards for clues as to what the market may do next. One of those leaders (as we have discussed in the past), has been the consumer discretionary sector as represented by XLY. XLY is above key support between $39.50 – $40.00 and needs to stay above this range in order to maintain a bullish leadership position. As for laggards like the financial sector (XLF), a confirmed bottom formation continues to elude the beleaguered sector. This weakness in such a key sector continues to be the anchor that has kept the markets from making new bull market highs since May.
The May trade balance gets reported Tuesday and the market will also examine earnings from Fastenal (FAST), Infosys (INFY), and Wolverine World Wide (WWW). In addition we have our eyes on a number of stocks, among there: FARM, CDOI, CBOU, SAVW, UPST, PWRV, POTG, RYUN, NG, AVL, REE, LEE, GBE, RYMM, IGXT, SNGX, AA, C, GS, LULU, UA, & JPM.
Did you know that you can watch Stockhaven trade live in real time?
Learn how to daytrade by watching someone else trade! Watchhimtrade.com is the only site that lets you look over the shoulder of a professional daytrader.
Watch this video now where he shows you how it’s possible to make 100% in just 5 minutes!