Stock Market Wednesday Bounce :: The Market Oracle :: Financial …

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Stock Market Wednesday Bounce

Stock Markets 2014May 08, 2014 – 12:01 PM GMT

Courtesy of Doug Short: The US market faced a mix of news today: 1) The Nikkei plunged 2.93%, marking its first YoY decline since late October 2012, 2) Yellen testified before the Joint Economic Committee, and 3) Putin signals readiness to ease on Ukraine. The S&P 500, prompted by positive futures, opened higher but quickly sold off to its -0.42% intraday low. Thereafter Yellen’s testimony and some toning down of “Putinism” led the index higher in a couple of waves. It ended the day with a 0.56% gain, just fractionally off its 0.59% intraday high in the closing minutes.

The yield on the 10-year note finished at 2.61%, up 1 bp from yesterday’s close and 2 bp above its 1014 low. The 10-year yield is well off its 3.04% close at the end of 2013.

Here is a snapshot last five sessions.

Here’s a daily chart of S&P 500. Volume rose as the index successfully tested its 50-day moving average of price for the second time in eight sessions.

A Perspective on Drawdowns

The chart below uses the percent-off-high strategy for illustrating the drawdowns greater than 5% since the trough in 2009.

The S&P 500 is now up 1.61% for 2014 and 0.67% off its April 2nd record close.

Here is a longer perspective, starting with the all-time high prior to the Great Recession.

For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.

– Phil

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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)

© 2014 Copyright PhilStockWorld – All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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