Wednesday, May 25, 2011
Continuing with our technical theme from yesterday, stocks are going to open lower this morning, with the S&P 500 coming ever closer to breaking another short-term support level at 1,300. Like dominoes, once we start punching through these support levels, the momentum on the downside should build, pushing stocks ever lower. Today's Durable Goods number (April), showed a drop of 3.6% for durable goods (stuff that last at least 3 years), mainly driven by aircraft (Boeing) and autos. The autos numbers are probably down due to the disruption in component supplies from Japan, due to the earthquake, tsunami, and nuclear disaster. Durable Goods numbers are really volatile, so I don't put a lot of weight into this report, but it gives stockholders an excuse to sell, which is all they need.