Major averages closed near their lows Friday with the S&P 500 and Dow Jones Industrials both finishing under their respective 50-day moving averages. Even though volume was lower for both averages, this is the first time they have broken below this moving average since last December.
In addition, even though University of Michigan's Preliminary Consumer Sentiment came in much stronger than expected along with strong April retail sales and business inventories, markets were unable to stage a rally. This suggests markets are vulnerable to more downside. Keep a close eye on short-sale set ups in the days ahead.
Indeed, the number of distribution days continues to be substantial so the question remains whether QE can create another shallow floor and push markets higher, or will the market correct further as it did in last August and earlier this year. Given the number of headwinds, the odds seem to favor a deeper correction.
Futures are up after Goldman Sachs raised its forecast for crude oil prices after previously forecasting lower prices. Warren Buffet also disclosed a 9.8 million share stake in APPL, which makes us wonder where he was the entire time the stock was on an epic upside price run that began back in 2004. We question such news events as legitimate catalysts for a market rally, however, and would watch a gap-up open this morning closely for signs of failure.
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.