Stock Market Two-Day Rally Ends with a Small Loss

By: PhilStockWorld

A two-day rally in the S&P 500 was snapped today by a small decline. The index opened fractionally lower and spent the next hour struggling at the level of yesterday’s close. It then slowly zigzagged to its -0.45% mid-afternoon intraday low. A late rally trimmed to loss to a modest -0.16.

The big economic news this week will be tomorrow’s Retail Sales, although we won’t have an official deflator for Real Retail Sales until the CPI data is released a week from today.

The yield on the 10-year Note closed at 2.46%, up two bps from yesterday’s close.

Here is a 15-minute chart of the past five sessions. The major uptrend on Friday continued on Monday to its late-morning peak. The two subsequent intraday highs reflect an orderly pattern of selling. The S&P 500 is up 4.62% year-to-date and down 2.73% from its record close on July 24th.

Today’s low market volume, 23% below its moving average, continues the recent downtrend in activity.

A Perspective on Drawdowns

The chart below incorporates a percent-off-high calculation to illustrate the drawdowns greater than 5% since the trough in 2009.

For a longer-term perspective, here is a pair of charts based on daily closes starting with the all-time high prior to the Great Recession.

- Phil

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

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