Following a two-month rally, in which the Nasdaq Comp and Russell 2000 were up nine straight weeks and the S&P 500 and Dow were up eight out of nine, the major averages finally saw profit taking this week. Despite being an options expiration week, things slowed down considerably as the bank stress test results have been released, first quarter earnings season has wound down and summer is fast approaching. Will it be a late sell in may and go away effect or just summer doldrums that we have seen so many times in the past?
Looking ahead to next week, there will be a smattering of important earnings release, with Home Depot (HD) and Hewlett-Packard (HPQ) out on Tuesday (5/19) and Deere (DE) and Target (TGT) out on Wednesday (5/20). It will be a much slower week on the economic calendar, however, with the only notable releases being Housing Starts/Building Permits on Tuesday and FOMC Minutes from the April 29 meeting on Wednesday.
As always we have a big ahead of us, here is the calendar, and nimble is key. I’m not so sure where we will land, we are in an uptrend off the lows but the question is, will last weeks downtrend be the the start of something bigger? I will be updating these names on twitter. Here are some names:
Picks
