The markets gapped lower today after Durable Goods orders disappointed. The markets continued lower into the 10:00am ET release of New Home Sales. Yesterday, Existing Home Sales cause the market to sell sharply yesterday, today, New Home Sales faired no better. New Home Sales were reported down 12.4% from last month. This slammed the markets quickly. Ultimately the markets bounced back quickly as this report was already factored in from yesterdays negative Existing Home Sales report. The markets may have made a short term bottom. Very short term.
There are certain things that need to be noted in this market today. It is obvious the market has been weak of late but many major stocks are into key support areas. The market may be due for a small short term bounce. Look at charts like Financial Select Sector SPDR (ETF) (NYSE:XLF), Cisco Systems, Inc. (NASDAQ:CSCO) or even the United States Oil Fund LP (ETF) (NYSE:USO). These are random ETF’s and one technology stock yet they all have something big in common. They all are into major support levels. The financial ETF (XLF) hit a beautiful double bottom on the daily chart. Cisco has hit a major triple bottom area and the USO has nailed a gap fill level around $31.85. This is just a small example of what is being seen on the charts. This shows a likely very short term bounce in the market. After that, the selling will resume and lower the markets will go. In the mean time, look for that small bounce in the next few days to one week. To get more analysis, exact swing trades and education, join the Research Center.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
