MLR - PMP 6/3/13

Published : June 3 2013 at 9:06 ET

Major averages sold off Friday on higher volume in downside move that accelerated sharply into the close. The market has now shown two heavy-volume reversal type days off of the peak over the past two weeks, giving the NASDAQ Composite a total of four distribution days around the peak. While the NASDAQ held above the prior week's lows, the S&P 500 broke to a lower-low since the prior week's massive-volume outside reversal day following the Fed policy announcement. While the month of May generally disproved the old aphorism, "Sell in May and go away," investors should be alert to any potentially changing market conditions in June.

In economic news, we know that the stronger the economy, the greater the signs of a recovery, and the greater the odds the Fed and other central banks may start slowing quantitative easing. On Friday, economic news was mostly positive, with the Chicago purchasing managers index for May trouncing the consensus estimate of 50. The University of Michigan's consumer sentiment survey for May also beat expectations but by a smaller margin. The only downside was personal income and personal spending in April both which missed expectations.

Tesla Motors (TSLA) sold off hard on Friday to test its 10-day moving average, but barring some sort of pocket pivot move off of the 10-day line we would give the stock some time to find its footing and perhaps build a new base, something it likely needs to do following a 187% run-up over the past nine weeks.


This information is provided by Virtue of Selfish Investing, LLC (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2016 Virtue of Selfish Investing, LLC. All rights reserved.