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Monday, June 6, 2011

Stocks sinking in last hour of trading

The Dow is only off 45 points, but stocks in general are fading as we enter the last hour of the session.  The S&P 500 is down 11, at 1,288, which means it has broken down through the 1,300 level and the April low of 1,294.  We are headed towards the 1,250 level as the next support.    1,288 is also the 150-day moving average, so if we crack that level, technical traders will see that as yet another technical break-down.

Bank stocks, in particular today, with Citi off 4%, and Wells getting a downgrade.  It's not a pretty picture and things appear to be deteriorating quickly.  I advise cautious optimism.  Have your game plan in hand and be ready to pull the trigger on your key purchases of those stocks you wish to own long-term.  I will be looking to put some cash to work at 1,250 and then, if the S&P 500 falls further, around 1,200 if we get that low.

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