Rusty Market Musings » GDP

25/06/2009 Uptrend on GDP revision

LtPinback — Thu, 25 Jun 2009 22:55:04 +0000

From the beginning of the trading day the market experienced a strong uptrend that held for the rest of the day. Volume was below average.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

GDP was revised upwards and initial claims rose for a second straight week. GDP data prevailed and thus the rally.

S&P 500 Index Daily Chart

20/05/2009 The beginning of the meltdown?

LtPinback — Wed, 20 May 2009 22:24:15 +0000

The market opened at yesterday’s high and tried to rally for about an hour. After the first hour of trading a meltdown sell-off started that found some support at the Pivot Point but that ultimately failed and ended just above the 900 support. Volume was a bit above average.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

The Federal Reserve’s GDP and economic outlook for 2009 is gloomier than expected. Market reacted quite badly and a meltdown from this levels is possible.

S&P 500 Index Daily Chart

29/04/2009 GDP ignored. Shall we trust efficient-market hypothesis?

LtPinback — Wed, 29 Apr 2009 23:24:55 +0000

General move today was very similar to yesterday’s but around 10 point higher and without so much choppiness. A new high since mid January was printed at 882.06 but the close was at 873.64. Volume was average.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

Q1 GDP was worst than expected but the market data-mined a need to rebuild inventories out of the data and spun it as positive. FOMC said the economic outlook had improved modestly since its last meeting in March.
On the technical side, the new high must follow trough quickly or it may end up prompting a retracement phase due to rally exhaustion. This was the third testing of the 870-880 resistance range since the March lows and the fifth since the beginning of the year.

S&P 500 Index Daily Chart

The 825 Battle

LtPinback — Thu, 26 Mar 2009 22:50:58 +0000

A very slow and choppy trading day. The starting gap up was closed to yesterdays’ close and then the price battle moved to the 825 battlefield. Every tick or move down was answered with an equal tick or move up and viceversa. Financials were expecially contested with a narrow channel for most of the day in XLF. Finnaly, thanks again to an EOD rally, what looked as a fake break for the bulls turned out to be a close above 825 on good volume. Volume overall was average but clearly much better on the uplegs movements.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

Weekly jobless claims rose to a record high in the latest week.

The Commerce Department announced its revision to 4Q GDP numbers showing the US economy contracted at its fastest pace since 1982 in the fourth quarter, but the decline was slightly less than expected.

The Technology Sector and Materials Sector represented by the S&P’s technology index and the materials index ended higher and are now positive for the year to date. NASDAQ Composite also turned positive on the year. This strength was the result of better-than-expected revenue and net earnings for the year with an improved outlook by electronic retailer Best Buy (BBY).

On technical grounds the close above the strong resistance level at 825 was important as its shows the bulls’ conviction. It is to be noted that previous bear market rallies of this magnitude signaled the bottom of the recession. If this holds a retest to the March lows seems very unlikely. Nevertheless, short-term we are largely overbought. Next resistance levels are the downtrend line from the November highs resting at around 843 and the 850 resistance level. Important supports are the 800 and 750 levels and the 50 day SMA at 792. Fibonacci suggest that a retracement from today’s high will take the S&P 500 ticker to either the 770,750 or 730 levels.

Update: As StockJockey pointed out in StockTwits “we have had the biggest two week rally in 78 years”.

S&P 500 Index Daily Chart

Choppy market

LtPinback — Fri, 27 Feb 2009 22:22:22 +0000

The market started making new lows (S&P 500 734.52) from those of November (S&P 500 741.02). The rest of the day was choppy and ended with the S&P 500 closing at a 12 year low. Volume was high.

S&P 500 Index 5min Chart

S&P 500 SPDRs 5min Chart

Surprisingly the S&P 500 printed a 12 year low but no crash occurred. Also fear indicators while high remained pretty much stable. Three news dominated the market day.

The government converted up to $25 billion of Citigroup’s preferred shares to common stock.
U.S. GDP shrank 6.2 % in the fourth quarter (vs 5.4% exp).
GE slashed its dividend by 68 % to 10 cents.

The Financial Sector fell on the Citigroup news. The Health Sector continued to print a substantial decline on budget plans.

S&P 500 Index Daily Chart

Trivia:

The S&P 500 marked its fifth down month out of six and the biggest drop since October.
U.S. stocks have lost $10 trillion since peaking in October 2007.