STTG Market Recap Mar 18, 2013

Some bad news out of Europe was a catalyst for selling Monday but stocks finished well off their lows despite a late day selloff.  The S&P 500 fell 0.55% and the NASDAQ 0.35%.   Most indexes were down over 1% at the open, and worse in the overnight session Sunday.  The tiny country of Cyprus was the culprit as a plan was floated that would incur losses on depositers at banks as part of a bailout agreement.  This is the first time such a step has been taken in the multi year Europe debt crisis, and investors began to worry it would set some form of precedent.  But as the day progressed some cooler heads prevailed.   That said, Europe remains a mess.

Under the provisional agreement with Cyprus, the European Union has required a one-time tax of 6.75% on bank deposits of less than €100,000, and 9.9% for those over that amount.

Let’s see what affect the selloff had on the indexes:

We can see on the S&P 500 stocks originally opened below this ascending channel that for the most part has held since mid November (with two coffee breaks).  However the snap back rally pushed the index well inside the channel, although the late day selling pressure pushed it back near the bottom line.

The NASDAQ broke its channel but most eyes will focus on the S&P 500 so let’s not get too worried about it yet.

One commodity that was hit dramatically today was copper which is generally seen as a global economic indicator.  That said, if it’s due to QE or some other reason, it has been a major laggard even as many equity markets race forward.  A strange situation.

Gold, which you’d normally expect to rally strong on such “turmoil” bounced but nothing special here.  This commodity needs to get back over the mid $1600s before we can even begin to think of a trend change.

Ironically, Apple (AAPL) was one of the stars of the day – unlike first half of 2012 when Apple was a market leader, in 2013 it often seems to move completely opposite from the market.   After making a full round trip to fill the gap it created in January 2012, the stock has now bounced smartly the past few sessions.  Unlike gold we can see Apple quickly racing towards the downward trend line that should prove to be some resistance.  If in future weeks it can jump over that, we may have something more than an oversold bounce on our hands.

Other standouts were in the real estate sector with two names that should be familiar to anyone who has looked to buy or sell a house in the past few years – Zillow (Z) and Trulia (TRLA).  There is a host of housing economic data later this week but these names are showing serious relative strength; note the volume explosion on Trulia Friday.  This was due to a follow up stock offering – considering the market the past two days and the offering of stock, it is impressive to see the stock act like this.

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