The mood was somber on Monday with investors selling stocks lower and the S&P almost touching the 200 day moving average. This has been a steady sell-off with no let up now for 5 straight days. Today the S&P pulled back from the 200 day moving average to close off the lows for the day, but overall the outlook is poor.
There never is a good time to take a holiday when it comes to active investing. This week I am trying for a short vacation which ends on Friday but the market certainly is not co-operating.
Advance Decline Numbers
Today 3.8 billion shares traded hands on New York and 462 new 52 week lows were made. Only 14 stocks made new highs. 76% of all volume was to the downside. The bears are definitely in charge.
Market Direction Outlook For July 28 2015
You can see in today’s chart below that the selling has been steady, taking the S&P back from its highs to close just above the 200 day moving average. All in all the chart looks ominous but number wise, the S&P is down from an intraday high of 2132.83 on July 20 to today’s close of 2067.64 for a drop of about 65 points. It actually isn’t that big a drop but the advance decline numbers are telling us that stocks could have a lot further to fall this time.
SPX to July 27 2015
With the Shanghai Composite index literally falling apart despite government intervention, investors in China are learning what we already know, that stocks are emotional investments and when investors worry, they sell and if they have to they will sell at any price to get out of stocks. This is having an impact on North American indexes and while the downturn since July 20 is not huge number wise, it is the longest period of daily sell-offs that stocks have seen since January.
Stocks are oversold but there still is room for them to fall further before buyers will start to pick up shares with much conviction. For Tuesday I am still on holiday but stocks are not. Stocks look weak and ready to move lower but first we could see a bit of a bounce back on Tuesday before more selling commences.
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