Stocks fell Monday as part of a consolidation of a large move up from mid November. Potentially ominous is the appearance of an “outside day” similar to the one seen at the lows November 16th, although this one was to the downside versus the session to the upside in November. The S&P 500 fell 0.5% while the NASDAQ dropped 0.3%. There was a bevy of economic news across the globe – in China, a purchasing managers index showed the first expansion since October 2011 while in Europe drab data continues to pour out. In the U.S., a manufacturing report from the ISM came in contractionary at 49.5 versus an expectation of 51.7 – anything below 50 is a negative; this was the worst reading since summer 2009. Despite all that stocks held in most of the session until fading late.
The S&P 500 posted a bearing engulfing candle today, after being rejected at the 50 day moving average as the index rose slightly above April 2012 highs intraday. At minimum this calls for caution near term.
The NASDAQ didn’t quite fare as poorly but also was rejected at a similar level.
Facebook had a very similar day to the major indexes, and across the spectrum many stocks staged similar reversals.
On the positive side, the dog that is the stock of Dell (DELL) actually had a positive day on a Goldman Sachs upgrade – but even with this name you can see it closed at the bottom end of its daily range.
Marketwatch has a story up titled - The 10 People Who Led us to the Fiscal Cliff. Interesting food for thought.