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MARKET COMMENTARY - Friday, March 27, 2015
Stocks finished little changed on Thursday after recovering from earlier lows that were much worse. The Dow fell 40 points to 17,678. The S&P 500 retreated 4 points to 2,056. The volume totals were reported mixed, higher on the NYSE and lower on the Nasdaq exchange versus the prior session totals. Decliners led advancers by a 3-2 margin on the NYSE and more than 5-4 on the Nasdaq exchange. Leadership has dried up, with only 4 high-ranked companies from the CANSLIM.net Leaders List that made new 52-week highs and appeared on the CANSLIM.net BreakOuts Page, down from the prior session total of 36 stocks, and down from 150 stocks on Friday, March 20th. The list of new 52-week highs matched new 52-week lows on the NYSE, and new lows outnumbered new highs on the Nasdaq exchange. There were gains for 10 of the 13 high-ranked companies currently on the Featured Stocks Page, showing a favorable bias, versus the broader market's more negative slant
Concerning the M criteria, the major averages' have endured distributional pressure while leadership has contracted, putting the rally under pressure. New buying efforts should only be made in stocks meeting all of the fundamental and technical guidelines the fact-based investment system.
PICTURED: The Nasdaq Composite Index declined 13 points to 4,863, sinking toward prior highs. It showed encouraging resilience after briefly undercutting its 50-day moving average (DMA) line, finishing above the midpoint of the session.
The major averages searched for direction amid Saudi Arabia's offensive in Yemen. Turning to economic data, in March a measure of sentiment in the services sector rose more than expected, but a gauge of manufacturing activity surprisingly tumbled. Last week, jobless claims fell more than projected, spurring speculation of expedited rate increases.
At the close, eight of the 10 S&P 500 sectors were lower as gains in technology offset weakness in industrials. Transportation stocks suffered from a rally in oil prices. American Airlines (AAL -1.43%). Utilities were off the most as Duke Energy (DUK -0.81%). Consumer discretionary was weighed down as negative analyst commentary pushed Macy's (M -2.26%) lower. Tech stocks snapped a losing streak. Positive earnings lifted Accenture (ACN +6.76%), and Apple (AAPL +0.70%) rose.
Treasuries fell amid a $29 billion auction of seven year notes. Weak auction demand helped the 10-year note lose 20/32 to yield 2.00%.
Commodities were mixed. WTI crude surged +4.2% to $51.27/bbl on the heels of the Saudi offensive in Yemen. COMEX gold gained +0.5% to $1,203.10/ounce. In FOREX, the dollar gained +0.3% as the euro fell -0.8% to $1.0886/EUR and the yen strengthened 0.2% to ¥119.21/USD.
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Modest gains from influential financial shares helped offset broader weakness on Thursday as the Bank Index ($BKX +0.28%) and the Broker/Dealer Index ($XBD +0.43%) both posted modest gains. Energy-related shares were mixed and little changed as the Oil Services Index ($OSX +0.18%) edged higher and the Integrated Oil Index ($XOI -0.15%) edged lower. The Retail Index ($RLX -1.01%) fell and the Semiconductor Index ($SOX -1.39%) created a drag in the tech sector. The Networking Index ($NWX +0.01%) finished flat and the Biotechnology Index ($BTK -0.28%) suffered a small loss. The Gold & Silver Index ($XAU -1.58%) lost ground.
Charts courtesy www.stockcharts.com
PICTURED: The Biotechnology Index ($BTK -0.28%) suffered a 5th consecutive loss, testing its 50-day moving average (DMA) line which acted as support on prior consolidations.