We are again seeing the S&P 500 come into the 1340 area. If you look back throughout 2012 you can see how 1340 provided support in February and early March multiple times, then was resistance in May and early June. Since then we've seen the index thrash violently around it (and its friend 1370). If yesterday's lows break later today it could provide some fireworks going into Apple's earnings.
This is another of those sessions where the index is not showing what is going on under the surface – I don't have a single sector ETF in the green despite the market 'only' being down 0.6%.
On the economic front a decent number in the housing market yet again but an awful regional Fed survey.
You may not have noticed but yesterday was the 8th straight Monday down for U.S. markets. This is a relatively rare occurrence with the last coming in 2002 – and these 2 episodes the only ones since 1985. While a random factoid, it is interesting as the market has generally responded decently on Mondays due to merger announcements and the like over the years. According to Bespoke Investment the record for the DJIA is 14 weeks, back in 1963. Now that everyone is aware of it it will be interesting to see what next Monday brings. …
As mentioned Friday, this market has been akin to the saga between Lucy and Charlie Brown in regards to kicking that darn football. Just as things improve technically, the ball is pulled away and Charlie lands flat on his back. Last Wednesday the S&P 500 broke over a descending trendline connecting a series of multi month highs, a bullish condition. After a very quick run up, it would be sensible to expect a modest pullback but the hope with these type of "back and fills" is they are controlled and not violent. Instead we saw the S&P 500 push back downward in relatively harsh fashion Friday and U.S. investors are greeted with a substantial gap down this morning as Spain reintroduces itself to the risk spectrum. This is now going to create a break of the lower trend line that connected the lows of the past 8 weeks. All is not yet lost for the bull case but Lucy has a firm grip on the football and is eyeing the nearest treeline. …
It is amazing how some things can change course. Back in 2006-2007 (and even in pockets of late 2009 through 2010) the market was grasping at anything Chinese. We had the Chinese Facebook, the Chinese Youtube, the Chinese this, the Chinese that. Many of these names in the past few years have been on far weaker quality than the initial group back in the middle of the last decade (some state owned). And some of the smaller ones have come in through the back door i.e. reverse mergers. [Apr 12, 2011: (Video) CNBC - Muddy Waters - Beware the Chinese Reverse Merger] [Aug 3, 2011: China's Shortcut to America via Reverse Merger] I was always astonished at how many Chinese companies were listed in the U.S. relative to other BRIC countries. Russia has about a handful, India ~15, and Brazil ~30. China was somewhere around 200. …
Chipotle Mexican Grill (CMG) is getting pole axed today on what would normally be decent results – 8% same store sales, good earnings and revenue growth yada yada, but expectations are sky high for this name. The company said sales started to slow in April which should be no surprise considering the economy has had a serious slowdown the past 3-4 months.
A lot of the so called "yuppie" trade is being taken out and shot as well – Whole Foods Market (WFM), Lululemon (LULU), etc – plus anything high growth consumer discretionary such as Monster Beverage (MNST), Panera Bread (PNRA), Starbucks (SBUX), Buffalo Wild Wings (BWLD) and Dunkin Donuts (DNKN). Looks like fewer and fewer investors care about individual names and just sell off themes in one group nowadays.