Stock Market Update -May 25th

Looks like the caution I expressed last week was well warranted -the market pulled back hard this past week, and broke the recent uptrend from the March 17th low, taking us back below the 1400 level on the S&P 500! (see green trend line on the chart). Oil prices surged to $135, causing investors to pull back; airline, automobile, and financial stocks took a big hit, along with the US Dollar. We also got more bad housing numbers this week.


Next week the markets are closed for Memorial Day on Monday. On the calendar, we get 1st quarter GDP numbers, along with more housing data.

It looks like we may be starting a new down-trend, maybe a continuation of the bigger downtrend that started last October, which could take us below 1250 on the S&P 500.

News stories:
Bear Market Rally Fizzles Without Further Fed Boosts
Buffett sees "long, deep" U.S. recession
Four reasons big buildup in home inventories is ominous
Not (yet) the worst housing downturn
Bank failures to surge in coming years
China's newest export: Inflation
Booming Brazil: The new China
Latin America Going Strong

Moody's computer glitch led to incorrect rating of CPDO derivatives
When A Computer Glitch Mucks Up Bond Ratings
After Credit Computer Glitch, Credit-Rating Company Has Its Credit Rating Cut By Bigger Credit Rating Company
Moody's Faces Scrutiny of Error, Possible `Cover-Up'
Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.