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| Stocks: A Quickie - May. 12, 2005 |
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Summary
Based on some of my technical work, the stock market appears to be stalling and getting ready to roll over. The balance of this week could be telltale in the process.
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I have not written anything too detailed about stocks for a couple weeks now, since there has not been much new to talk about. I do plan a lengthier update soon, probably early next week.
In the meantime, though, I want to point out that some technical work is kicking in suggesting that the reflex rally off the late-April lows is getting tired and looks like it is getting close to rolling over. Today and tomorrow's combined results could be key in the overall process, but I would not be shocked to see these two trading sessions team up for a net negative outcome.
Through yesterday's close, my seven-measure tracking group was down an average 5.5% for 2005 to date. Declines ran in a range of 1.2% for the NYSE Composite, to 9.9% for the NASDAQ 100. And, of course, this is after a decent lift off the lows established late last month.
I'm still very much of the view that stocks will achieve double-digit declines during this year. Nevertheless, even the negative returns in place so far go well against the grain of what the consensus forecast had in mind -- still has in mind, for that matter.
In a missive I published not too long ago, I opined that the "go away in May" stock-market axiom might very well turn out to be accurate regarding May of 2005. Although the month is now approaching half over, I continue to think there could be some rugged days before May is history.
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