Some Minor Technical Damage Done In Today's Session
This afternoon, the major stock indexes are trading slightly lower on the trading day. Earlier today, the Dow Jones Industrial Average pierced the psychological 13,000 level. Since that high was made around the noon hour the markets have been slowly declining lower. Despite today’s shallow point decline in the major stock indexes there are still some technical sell offs worth noting.
The iShares Dow Jones Transportation ETF (NYSEARCA:IYT) is trading lower by 1.75 percent. That decline in the highly followed transportation index translates into a decline of 92.00 points in the Dow Jones Transportation Average.
Almost every seasoned trader follows the semiconductors stocks very closely. This afternoon, the leading semiconductor equipment makers are dropping sharply lower. KLA-Tencor Corp (NASDAQ:KLAC) is trading lower by $2.00 to $48.16 a share. Lam Research Corp (NASDAQ:LRCX) is another leading semiconductor equipment maker that is dropping by $1.63 to $40.35 a share. It is important to note that these stocks were market leaders in early February.
High oil and energy prices are also a major problem for these markets. How can the average person afford $4.00 gasoline. All traders know that it was high oil and energy prices that broke the stock market and the economy in 2008.
The leading Chinese ADR's are all trading lower today despite the Chinese easing their bank reserve requirements. Leading Chinese ADR's such as Baidu Inc (NASDAQ:BIDU), Sohu.com Inc (NASDAQ:SOHU), and Sina Corp (NASDAQ:SINA) have been under selling pressure for most of the day. If the Chinese economy begins to decline again this stock market rally; that started in December 2011, could be in jeopardy.
Another factor that is telling us this market could be facing headwinds soon is simply that the markets are trading lower into the close. Since December 19, 2011, the major stock indexes have usually rallied after the lunch hour. This late day decline is a small change in character from what we have been accustomed to seeing.