Market update Monday May 14

S&P 500 Heatmap

As seen in the S&P 500 heatmap above, all sectors were mostly showing losses. A few stocks showed some gains, such as Cisco, Yahoo, Chesapeake Energy; each of these showed +3% rise in stock price. The worst sector for the day was the financial sector, with stocks losing more than 3%.

The chart to the left is of the SPX (SP-500). It has been declining since May 1 and is now in oversold levels according to the Stochastics, MACD and RSI. There is no definitive trend line present, but it is still above the 200 day, which is still a good sign that it is in a uptrend, but it is below the 20 and 50 day moving average. This gives us a good idea that the overall market is in a downtrend, and that proved true with today's trading session. We can basically continue to see some more loss for a few more days. We will want to wait until we see some strength to get into new positions. This is where we need to wait for the Stochastics, MACD and RSI to reverse. Once it does, we have confirmation that the market is heading higher. However if the price comes down near the 200 day moving average and crosses it, we might be in a new downtrend.