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Markets denied from the highs

Markets Denied from its Highs - March 14, 2014
Markets Denied from its Highs - March 14, 2014
Chun Bong Lai

In the previous article, I mentioned that there's a possibility for these all-time-high markets to have a correction. There it is! This past week, the DJIA had lost around 400 points from its highs at 16,450 level. While the 16,000 level is a big support level, I believe the markets will head lower maybe to 15,600 to 15,700 level in the coming week.

We started off with a weak China export data on Monday; it caused the world stocks, copper, and oil all dipped during the trading session. On Tuesday, J.C. Penney got an upgrade. Additionally, Men's Wearhouse paid $65 per share to buy Jos. A. Bank (finally). On Wednesday, Federal Trade Commission opened inquiry into Herbalife; Herbalife dropped more than 7% on the same day. On Thursday, stocks fell sharply - more than 200 point - because of the Ukraine worries. Moreover, Amazon raised the price of Prime membership to $99 per year - that's a 25% increase since nine years ago when the Prime first introduced to the public. More news from Thursday: U.S. budget deficit narrows in first five months of fiscal year; Number of U.S. millionaires hits new high; U.S. environmental agency drops ban on federal contracts with BP; Shell cuts spending in U.S. to lower shale exposure. On Friday, the FDIC sued large banks for their alleged role in manipulating a global benchmark used t o determine interest rates on everything from home loans to corporate debt. More news from Friday: Treasuries posted largest weekly gain in two years; GoDaddy eyed initial public offering; Wall Street ended lower on jitters over upcoming Crimea vote on Sunday; Chinese social media company Weibo plans US debut.

As you can see, many of these news are negative. Next week, we want to see if the DJIA can maintain above the 16,000 level - the key level. If it cannot maintain that level, then the market will drop lower straight to the 15,600 to 15,700 level.