Thursday, May 11, 2006

Weak Into The Close

The market has not been able to find its customary late-day lift. The COMP is down nearly 50 points, which is the equivalent of roughly 250 Dow points.

Breadth is very weak, and volume is rising. This will make for a pretty strong distribution day, pointing to more weakness. Measures of investor anxiety have started to pick up a little, but it is just a start.

Oil is back up over $73, and bond yields are up near year highs at 5.16%. It seems that the prospect for higher energy prices, higher interest rates, slower housing, and slower economic growth have unsettled the market today.

GOOG is taking a hit, and if flirting with support at it's 50-day. SBUX has broken strongly below its 50-day. And URBN looks like it may have found a short-term bottom coinciding with today's earnings report.

I will be suprised if the market doesn't see at least some additional weakness in the near-term, and have raised some cash accordingly.



At 4:23 PM, Blogger muckdog said...

I'm surprised that SBUX and other daily splurges haven't been hit more by higher fuel prices. Maybe folks don't consider that discretionary spending...

At 11:14 AM, Blogger J. Kahn said...

No, they'd probably rather pack lunch than skip their latte. I think consumers will cut back on higher priced items first, like a new pair of shoes or maybe a fancy dinner.

But for now, I think more people are just complaining about gas prices than actually changing their behavior.


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