By Gareth Soloway on March 26th, 2010 2:25pm Eastern Time
The markets, for the second day in a row have reversed earlier gains, dropping back to the flat line. The reversal yesterday, came at my master $118.15 level on the SPDR S&P 500 ETF (NYSE:SPY). So far, this level looks to have signaled a short term downtrend in the markets. Whether or not it turns out to be anything bigger, I will discuss in tonights nightly technical analysis video, which is part of the Research Center.
Today, the volume trends continue to be the same. Any bounce in the market are not because of major buying but because of lack of selling. Any drops in the market are because there is volume behind them.
The markets seem to be tempting a key pivot point. What do I mean by this? After yesterdays monster reversal, the market looks to give signals on whether or not it will be just a one or two day affair or something larger that could last a week or maybe more. I am currently crunching all the data on this. I did find it very interesting that yesterday, on good news, the markets were not able to hold their gains. Today, even more interesting, the dollar is lower and the markets still dumped out. For the first time in quite some time, the positives on the market are unable to hold it up.
Goldman Sachs Group, Inc. (NYSE:GS) is among the weaker stocks today, while JPMorgan Chase & Co. (NYSE:JPM) continues to try and hold on to recent gains. These two stocks over the last few days have been very much the opposite of one and other. It seems that there is fear of financial regulation with Goldman Sachs in regards to its risky trading. JPMorgan Chase, on the other hand is looked at as much more of a pure bank. While both stocks are up over the last few weeks, JPMorgan has continued to soar while Goldman Sachs has stalled. Technically speaking, both stocks are overbought and in need of a small correction. It looks like it is underway with Goldman Sachs but still hard to come by for JPMorgan Chase.
Other stocks hitting my watch list for a possible pullback after crazy gains are United States Steel Corporation (NYSE:X) and Baidu, Inc.(ADR) (NASDAQ:BIDU). Bloated is the only way to describe them.
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Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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