Stocks finished off their worst month of 2013, in losing fashion. The S&P 500 dropped 0.32% and NASDAQ 0.84%, essentially washing away yesterday's gains as many headed off early for the holiday weekend, while others did not want to extend their exposure to stocks ahead of potential bombings of Syria in the coming days. For the month the S&P 500 fell 3.1% and the NASDAQ 1.0%. It was a very slow motion correction this month. There were two economic reports but they were mostly ignored.
Consumer sentiment retreated to 82.1 in August from 85.1 July, according to the Thomson Reuters/University of Michigan's final reading on the overall index. The result topped economists' expectations for a read of 80.5. Meanwhile, consumer spending ticked up 0.1 percent in July, according to the Commerce Department. Economists polled by Reuters had expected a gain of 0.3 percent.
The S&P 500 continues to travel in this downward channel and has bottomed out 3 of the past 4 sessions in a very similar area just below 1630.
The NASDAQ continues to be stronger overall in a relative sense.
Volatility continues to increase as shown by the VIX index... lower is better for bulls.
We spoke of oil mid week saying it had broken out but to be careful as this was news driven and could be a buy on the rumor, sell on the news situation. Well, the selling did not even wait for the news as it was a failed breakout.
Transportation stocks continue to be weak as illustrated in the transportation index.
The chart of Yelp (YELP) - which we highlighted yesterday as a winner - is an example of why these markets are difficult to invest in. The stock broke out yesterday but rather than following through, there was a major reversal today. When stocks cannot build on breakouts, it is not a healthy market. We continue to see very selective action.
The big winner of the day was Salesforce.com (CRM) as it hit an all time high, but again this was a very stock specific story and the move came due to earnings, not general market action.
...the cloud software company lifted its 2014 sales outlook after posting better-than-expected quarterly results. In addition, at least six brokerages boosted their price targets on the company.
Of course we are off Monday for the holiday but will return to a week of heavy economic data and of course more conversations about Syria and tapering of quantitative easing. See you after the holiday.