All of the major market averages, except the NYSE Composite, closed last week below their quarterly pivot levels. The PowerShares QQQ Trust (QQQ) had closed below its quarterly pivot a week earlier, on April 4, and is now close to the quarterly projected pivot support at $83.53.
Last Friday?s review of the market?s corrections in 2010, 2011, and 2012 revealed that they coincided with overly-pessimistic views of the economy or markets. The current concern seems to be focused on, what is expected to be, a weak earning?s season. The positive long-term readings from the NYSE Advance/Decline identified that these corrections would ultimately lead to a good buying opportunity.
That is also the case this time, but stronger sells signal are possible this week that would indicate that the current decline has further to go and will last longer. The growing tensions in the Ukraine do add a further ?real? concern to the markets over the near term.
The European markets were hit in early trading, before rebounding, and the US futures are now in positive territory. Many are watching the 1800 level in the S&P 500 which, if broken, could signal a decline to the 1770 area. However, a rally is likely below these stronger levels of support and could be tested.
The improving relative performance of the SPDR Dow Industrials (DIA) indicates that some large-cap stocks should be on your buy list during the market correction, but what other stocks look attractive?
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