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MARKET COMMENTARY - Tuesday, April 28, 2015
Stocks fell after setting all-time highs on Friday. The S&P 500 declined 8 points to 2,108. The NASDAQ slid 31 points to 5,060. Monday's volume totals were reported higher than the prior session totals on the NYSE and on the Nasdaq exchange. Breadth was negative as decliners led advancers by more than a 2-1 margin on the Nasdaq exchange and nearly 2-1 on the NYSE. There were 51 high-ranked companies from the CANSLIM.net Leaders List that made new 52-week highs and appeared on the CANSLIM.net BreakOuts Page, up a notch from the prior session total of 50 stocks. New 52-week highs still easily outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange. There were gains for only 3 of the 15 high-ranked companies currently on the Featured Stocks Page.
Concerning the M criteria, the major averages have overcome recent distributional pressure and leadership (stocks hitting new 52-week highs) has remained healthy, helping the rally continue. New buying efforts should only be made in stocks meeting all of the fundamental and technical guidelines the fact-based investment system.
PICTURED: The Dow Jones Industrial Average erased early gains and ended with a loss of 42 points to 18,037. Prior lows define near-term support below its 50 DMA line.
The major averages finished lower as a retreat in biotech overshadowed strength in commodity producers. At the close, seven of the 10 S&P 500 sectors were in negative territory. Mylan (MYL -5.7%) tumbled and Teva (TEVA -4.3%) also fell after Mylan reaffirmed its decision to rebuff Teva's unsolicited bid for the company. Applied Materials (AMAT -8.4%) gapped down after dropping acquisition plans on antitrust concerns. In materials, Freeport McMoRan (FCX +4.8%) rallied in sympathy with commodity prices. DuPont (DD +4.6%) rose after appointing activist investors to the company's board.
Economic data was light with a measure of services sentiment missing projections for April.
Treasuries fell amid a $26 billion auction of two-year notes. The two-year security fell 1/23 to yield 0.52% and the 10-year note lost 5/32 to yield 1.93%.
Commodities finished mixed. WTI crude declined 0.6% to $56.80/barrel but increased inflation expectations lifted COMEX gold by 2.4% to $1203.30/ounce. In FOREX, the dollar ebbed 0.2% with the euro up 0.1% to $1.0884/EUR and the yen down 0.1% to ¥119.12/USD.
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Commodity-linked groups were Monday's leading gainers as the Gold & Silver Index ($XAU +2.47%) outpaced the Oil Services Index ($OSX +1.14%) and the Integrated Oil Index ($XOI +0.28%). The Retail Index ($RLX -1.18%) was a negative influence on the major averages along with modest losses from the Broker/Dealer Index ($XBD -0.80%) and the Bank Index ($BKX -0.26%). The Biotechnology Index ($BTK -4.02%) was a standout decliner in the tech sector while the Networking Index ($NWX -0.49%) edged lower and the Semiconductor Index ($SOX +0.34%) eked out a small gain.
Charts courtesy www.stockcharts.com
PICTURED: The Bank Index ($BKX -0.26%) is consolidating near its 50-day moving average (DMA) line.