Friday’s rout confirmed that the recent downtrend continues. The bloody red day was sparked by underwhelming results from the Employment Situation Report. The polled economists predicted that 150,000 new jobs would be created in May. Instead, only a net of 69,000 heard, congratulations, you are hired.
By closing at a new trend low, bears have made it clear that they aren’t done taking the market lower. Rising volume as stocks sink adds another piece of unwelcomed technical concern. As equities fall, investors want to see the number of shares trading dry up too. It is a sign that sellers are getting fatigued. The fact that volume is accelerating as stocks drop means we probably haven’t made contact with the bottom yet.
Based on what Top Equity News sees on the NASDAQ chat, the index appears to be eyeballing 2650 or 2600 as a potential landing spot. The first target would put the NASDAQ at nearly breakeven for 2012. All it will take is for the index to shave off another 90 points and it will be las if the hot start to start the year never happened.
The Dow has already wiped clean its 2012 gains and the S&P 500 is only 20 points away from playing the part of monkey do.
Overnight, Asian markets were down hard and European markets sort of mixed with only France on the plus side of zero. Pre-market US futures indicate a limp but mildly green opening bell; however, it would be a surprise if any upside lasted more than a day or two. Whenever trading produces a new, lower low than the previous pivot low, that means stocks have a few more steps down to go.
Clearly, a global slowdown and the threat of Spain’s banking institutions imploding, along with upcoming Greek elections has traders and central banks worldwide on edge. TEN believes you’ll start to hear a lot more about stimulus, either in the form of more debt spending, which will be called growth initiatives or investment, or more free digital dollars from Ben Bernanke.
The Federal Reserve has an interest in reversing that trend as a rising dollar due to the breakdown of the euro has helped crush stocks. A majority of S&P companies do most of their revenues internationally, and a strong greenback makes it more expensive to operate, which means lower profits; lower earnings equals lower stock prices.
Investors might start thinking about gold, silver and inverse ETFs to ride out the current turbulence. As we mention in the previous paragraph, government at some level will try to do something, that’s likely to plug a hole over here and cause a new leak over there, namely more inflation, trade accordingly.
Stock Market Trends: 10 Fingers and At Least 11 Leaks is an article from: 
