Recent housing and employment data suggests the U.S. economy is at a tipping point where a double-dip recession is possible and home prices could have much further to fall, a veteran economist said on Thursday.
Robert Shiller said the recent uptick in unemployment is not yet enough of a sign as to which way the recovery is heading. But if unemployment continues to rise in the coming months, it could suggest another recession.
"Whether we call it a double-dip or not, I think there is a risk," Shiller told Reuters Insider television in an interview.
Likewise, data showing U.S. home prices fell into a double dip in March could prove to be either a seasonal effect over the winter months or part of a downward trend.
"My gut feeling is we might see a continuation of the decline" in home prices, Shiller said earlier on Thursday at a Standard & Poor's housing summit.
He added that a 10 percent to 25 percent slump in real home prices "wouldn't surprise me at all," though he cautioned that was not a forecast.
A glut of houses for sale, ongoing foreclosures, tight credit and weak demand have kept the housing market on the ropes even as other areas of the economy start to recover.
Those headwinds have led the National Association of Home Builders to say the market will see no improvement this year.
"We now think single-family housing starts will probably be no better than they were in 2009, which basically tracked as the worst year on record," Jerry Howard, chief executive at NAHB, said during the summit.
Howard said their economists expect a slight uptick next year and a more robust housing market in 2013.
BOTTOM UNCLEAR
As for when home prices might bottom, Shiller told Insider that was unclear and it was possible prices could slide for 20 years.
"We've seen five years of decline already since the peak in 2006 and I don't see evidence that we're coming out of it," he said.
Shiller, known for warning about bubbles in the stock market and housing market, is also the co-founder of the S&P/Case-Shiller home price index. Last week the index showed single-family home prices in March slumped to lows not seen since March 2003, falling below the previous crisis-era bottom set in April 2009.
That report, along with other data, including grim jobs figures and a slowdown in manufacturing, suggested that the economic soft patch seen in the first quarter of the year could be more protracted.
Home prices had been supported last spring by a tax credit, but the housing market has struggled since the credit expired.
Speaking at a separate housing conference in Cleveland, Federal Reserve Vice Chair Janet Yellen said there was no quick fix.
"Looking forward, I unfortunately can envision no quick or easy solutions for the problems still afflicting the housing market," Yellen said. Even once the housing recovery takes hold, it will be "long and drawn-out", she said.
Nonetheless, she pointed to steps being taken to heal the market, including developing uniform national servicing standards, and giving banks incentives to participate in stabilizing communities.
While Gold is only 2% from all time highs, the gold stocks have struggled and underperformed badly. This is reminiscent of 2008, although we don’t think a similar result is coming. The fact is as QE 2 ends and the failed recovery peaks, money is moving out of risk assets and into Bonds. Gold is holding up very well but the gold stocks are struggling and in need of a catalyst.
Let’s take a look at GDX (large caps) and GDXJ (juniors). In the following chart we show both along with the bullish percent index for the sector, which is at 40% but often bottoms at 25%-30%. For GDX we note strong support at $48 and $50 with support at $51. Meanwhile, GDXJ remains above key support at $34. Should that falter we are looking at $31.50-$32.00 as the next support.
Whatever bullish sentiment there was at the end of 2010, has completely eroded. Assets in Rydex’ Precious Metals Fund (courtesy of sentimentrader.com) are near an 18-month low and very close to a two-year low.
We should also note that sentiment is not so bullish on Gold itself. Mark Hulbert‘sHGNSIindicator, which was 70% at the recent top, fell to 7% at the recent bottom and is now only 20%. Yes, with Gold only 3% away from a new all time high, the average market timer recommends mostly cash instead of a long Gold position. Furthermore, open interest in Gold futures is 22% off its high and the speculative long position is 21% off its high.
Technically the gold stocks are in a good low-risk position. However, there needs to be a fundamental catalyst for the sector to bottom, build a base and embark on a new sustained advance. Strengthening of the real price of Gold always helps, though its effect is not immediate and usually lags by a few months.
In the following chart we graph Gold against other markets. Similar to 2008, we see that the gold stocks are falling against gold yet Gold is quietly strengthening against Oil, Industrial Metals and the S&P 500. The real price of Gold began to strengthen across the board in September 2008 and it was only a month later that the sector bottomed.
As growth and deflation reemerge as the primary concerns, we will see Gold continue to strengthen against all markets and assets (sans Treasury Bonds). That is a positive though not immediate catalyst for the gold stocks. The worse the economic numbers and the worse conventional assets perform the more likely the Fed is to continue to provide increased artificial support. Moreover, the strong Treasury market provides the Fed political cover and the ability to monetize bad debts. They want to do this when Bonds are strong not weak.
To conclude, there is no immediate catalyst for the gold stocks but things are starting to move in the right direction. As the economy stalls and the equity market peaks more money will move out of risk assets and eventually into Gold and then the gold shares. We are already seeing the start as Gold is firming in relative terms. Look for a bit more weakness in the gold stocks but ultimately this summer should host a major low and the gold stocks will be in a fantastic position heading into 2012.
In a bull market you always want to buy the dips. In this sector, the dips can be exaggerated. Now is the time to pay attention. In our premium service we are uncovering many great prospects in the established and speculative categories.
The S&P 500 fell again yesterday, its sixth decline in a row, and the worst losing streak in over two years. But volume on the NYSE totaled just 1 billion shares, and decliners exceeded advancers by a mere 3-to-1 — hardly selling climax extremes. Now investors are asking, “How low is low?”
With the path of least resistance down for both the near and intermediate term, we turn again to the S&P 500’s daily chart. The most significant support is still at the 1,250–1,260 double black line. Adding significance to this zone is the uptrending 200-day moving average (solid red line), which intersects at 1,252 and the low of March at 1,249. Also note that the Relative Strength Index (RSI)red line at the bottom of the chart is approaching the lower channel of a pattern that began in November, and this should provide support. But will it?
Focusing on individual sectors shows that the decline is very broad. Note that the Semiconductor HOLDRs (AMEX: SMH) chart shares many similarities with the stocks of the S&P 500. Yesterday began a test of the April low at $33.50 with the next support at the March low. Note, too, the similarity of the downward channel of its RSI with that of the S&P 500.
And even completely unrelated industries are following similar patterns. The Market Vectors Gold Miners ETF (NYSE: GDX) chart shows a major support band is currently being tested. Yesterday’s close at $53.43 fell at the lower range of that band. A close under $52.50 could put more pressure on this group and confirm the validity of a double-top and a possible sell-off to the mid-$40s.
Conclusion: Stocks are deeply oversold, and there is a strong possibility of a relief rally. However, the intermediate direction of the market has turned bearish. Moreover, the broad-based nature of the decline is reminiscent of a buildup of negative sentiment that could overwhelm buyers as margin calls force further liquidations. The stock market is in danger of breaking down. Defensive action is warranted and rallies should be used as opportunities to lighten up on equities. Traders should revert to the short-selling strategies.
There is a strong possibility of a relief rally, but stocks are likely to continue their decline
July corn futures at the Chicago Board of Trade on Thursday morning hit a new all-time record high of $7.93 a bushel, surpassing the previous high of $7.88 3/4, scored on April 11. Prices did then back off the daily high and were trading near mid-range as of this writing. July futures prices have tacked on around 50 cents a bushel from this week's low of $7.29 1/4. Corn market bulls have gained fresh upside near-term technical momentum this week and are now looking for more on the upside in the near term.
The next upside price objective for the powerful corn market bulls is producing a close above major psychological resistance at $8.00 a bushel. Such would provide the bulls with additional power to suggest a fresh leg up in prices in the near term. If the Corn Belt weather patterns work in the corn bulls' favor during the critical corn pollination period that occurs in late-June/early-July, (meaning hot, dry and windy weather conditions such as those experienced in the Corn Belt earlier this week) then upside price potential in the corn futures market would be greatly enhanced.
Given the already extremely bullish and very tight supply and demand balance sheet for corn at present, any significant weather problems in the U.S. Corn Belt this summer would likely produce explosive upside price action. The corn market bulls would see their enthusiasm significantly dented if July futures prices dropped back and closed below strong chart support at this week's low of $7.29 1/4. Such would also be an early technical clue that market has put in a major price top. Near-term technical resistance for July corn futures is now located at the April high of $7.88 3/4, at Thursday's all-time high of $7.93 and then at $8.00. Support is seen at $7.70, at Thursday's low of $7.59 1/2, at $7.55 and then at $7.50. Stay tuned!
About a year ago Zero Hedge posted an article titled: "Record Number Of Americans Using Retirement Funds As Source Of Immediate Cash" after a report by Fidelity uncovered that "plan participants with loans outstanding against their 401(k) accounts had reached 22 percent versus 20 percent a year earlier." It is now time to revisit this very important topic because if recent press reports are true, last year's record number has just increased by another 50%. "On "The Early Show" Thursday, financial journalist and Newsweek columnist Joanne Lipman said, "Right now we have 30 percent of people who have 401(k)s have loans against their 401(k)s, which is a historic high. And the problem is, it's growing like crazy: By 2014, we're expecting to see 30 million people take loans against their 401(k)s." The raiding of the last ditch piggybank is on, and who can blame them? With banks setting the example of always reverting to the Discount Window (or the Excess Reserve stash as is now trendy) when in trouble, ordinary working Americans are merely following in the footsteps of their financially more "literate" betters. Unfortunately, unlike the "depositor" institutions, nobody will replenish these funds should they not be repaid and the retirement money is gone for good.
CBS News explains why raiding your 401(k) is so easy a caveman can do it:
Sheri Chaney Jones, of Columbus, Ohio, started a consulting business in October and borrowed from her 401(k) to help pay her bills.
"It was extremely easy,' she told CBS News, adding that her financial planner told her "she was seeing more and more people" do it, "because the banks were not giving loans out traditionally to small businesses anymore."
"It's not right for everyone," Jones noted, " but it is your money, you can borrow from it tax-free, you do pay yourself back at interest, but a very low interest, much lower than maybe a traditional bank."
Just like Wall Street sellside research, delusions are rampant:
"What I feel optimistic about," Jones says, "is that I will be able to grow this business to not only pay myself back at the current interest, but continue to contribute more toward the 401K than I would have if I would have stayed where I was."
And for those wondering why doing a 401(k) raid is the worst possible idea:
"It's a big, big problem," she remarked to co-anchor Chris Wragge, "and it's one that's really been under the radar. And the big problem is that, if you lose your job, you have to pay that loan back within 60 days. So suddenly, you have no income, you owe all this money back, and the fact is that most people are unable to pay it back.
"There was a survey recently that found that 70 percent of people who lose their jobs are unable to pay back the loan and go into default. And the number is even higher ... for young people -- it's closer to 80 percent."
It gets worse: "If you go into default," Lipman pointed out, "you've just raided as a piggybank your 401(k), you don't have retirement funds and you owe taxes and penalties."
Step aside HELOCs, here comes the pension money for iPad exchange:
Still says Lipman, "There are certain times when it makes sense. If you're secure in your job, if there is a one-time expense -- let's say you need money for a down payment on a home, that's fine. You know, that makes sense. Or for education, for medical expenses. You know, that can make a lot of sense. Because you are paying yourself back. And if you can stay on track, you're fine with that.
"But the problem is, when you use it as a piggybank. When people are using this to pay for a vacation, to pay for a home that's perhaps larger than they can afford - that's where we really get into trouble."
Luckily, Americans have demonstrated beyond a reasonable doubt that when it comes to abusing rainy day capital to satisfy trivial material needs, there is nothing to worry about. Nothing at all.
Jim Rogers says that the congress should take a chainsaw when cutting spending , America is already bankrupt they should not care much about the rating agencies triple A rating , the rating agencies have always been wrong in the last decade jim rogers says . America is the largest debtor nation in the history of the world. As the country goes deeper into the hole, how worried should we be? Congressmen shouldn't be worried about our credit rating, says Quantum Fund's Jim Rogers. America is already bankrupt, he says, and the only solution is to cut spending dramatically by "taking a chainsaw" to the budget. Unless something is done quickly, says Rogers, a disaster is imminent.
Since "the China Story" is the foundation of global growth, demand for commodities and ultimately, stock market profits, when China's stock market breaks down it behooves us to pay attention. Technical analysis offers a number of tools to help us chart the past and present and calibrate probablities of what might happen in the future.
Much of the time there are no clear signals, and chartists can lose their way trying to discern patterns and trends which may or may not pan out in the future.
In other cases, the technical tools provide very clear signals which investors choose to ignore at their own risk. These include "death crosses" (a short-term moving average dropping through a longer-term moving average) and price sinking below moving averages.
One classic pattern is a flag or pennant (a.k.a. a wedge). The psychology behind the pennant is rather transparent. Lower highs reflect a decline in Bullish enthusiasm and buying pressure, as every "buy the dip" fails to match the previous dip-buying.
The Bullish "story" that powers the "buy the dip" buying has rendered Bearish sellers wary, so each decline is shallower than the last. The tug of war between Bulls (buyers) and Bears (sellers) has reached a stalemate.
Whichever way the market breaks from this price/volatility compression sets the new trend's direction.
The direction of China's market has been decisively signalled: breakdown. In technical analysis, it doesn't get any better than this:
In the typical course of things, price may well rise in another "buy the dip" phase, but it will meet strong resistance at the lower trend line. Price may well noodle around for a while beneath this new resistance before cascading to previous lows.
Since the Shanghai market tends to lead the U.S. and other global markets, a breakdown in China's market can be seen as a predictor of what lies ahead in the U.S. and other global stock markets.
The wheels are falling off the China story. A massive wave of malinvestment since 2008 is cresting, and the stupendous stimulus provided by gargantuan local government and private lending is expiring.
That's what the chart is telling us if we "read between the lines."
Do you own shares of the hot stocks? You know the ones I'm talking about.
Apple Amazon.com Netflix Chipotle Priceline
Most people have at least a few of these, and some of the other hot stocks, in their portfolio. If you owned them since the 2009 lows, you've cashed in big.
How good have the returns been in these glamour stocks since March 9, 2009?
Impressive, indeed. But the well known stocks aren't the only game in town.
There are companies you may never even have heard of, some of which are much smaller or in industries that are considered less "glamorous" by investors, whose returns matched or, in some cases, surpassed this list of the glamour stocks during the same time period.
How could that be? What company could beat Apple???
These 5 little known stocks have also been champions off the 2009 lows. There's nothing glamorous about any of them but check out their returns for the same period as the so-called hot stocks.
1. The pawn shop operator: 231% 2. A fertilizer and grain storage provider: 244% 3. An industrial manufacturer of compressors around since 1859: 347% 4. The specialty resources provider to the oil and gas industry: 360% 5. An auto retailer: 764% Just who are these companies?
Not too bad for companies most investors have never heard of. But the good news is that all 5 of these companies still have solid fundamentals including rising earnings estimates and attractive valuations. The "story" is still intact with these companies. All 5 of them are Zacks #1 Rank (strong buy) or Zacks #2 Rank (buy) stocks.
1. The Pawn Shop Operator
EZCORP Inc. (EZPW) operates 500 pawn shops and 500 short-term consumer loan stores in the U.S., Mexico and Canada. In its fiscal second quarter results, revenue jumped 19% to $131 million. Same-store revenue also climbed 12%. The company raised full year guidance in April.
EZCORP is a Zacks #2 Rank (buy). The rally off the lows has been impressive.
2. The Fertilizer and Grain Storage Provider
The Andersons (ANDE) is an Ohio-based agribusiness company with offering fertilizers, grain storage and distribution, ethanol, specialty turf products and rail car leasing. The company reported a record first quarter as earnings per share jumped to 93 cents, blowing out the Zacks Consensus by 19 cents. Sales jumped 39%.
The Andersons is a Zacks #2 Rank (buy) stock. It has been a bumpier ride off the March lows for this stock.
3. An Industrial Manufacturer In Business Since 1859
Gardner Denver, Inc. (GDI) has weathered plenty of recessions and depressions in its time. The manufacturer of industrial compressors, blowers, pumps, loading arms and fuel systems which started out in Illinois with one location in 1859 is now a global player with 40 manufacturing facilities around the world.
The company had a record first quarter as revenues soared 26%. It also easily beat the Zacks Consensus Estimate by 20%.
Gardner Denver is a Zacks #2 Rank (buy) stock. The company has attractive valuations despite the shares soaring.
4. The Specialty Resources Provider
CARBO Ceramics Inc. (CRR) is one of the world's largest suppliers of ceramic proppant for fracturing oil and gas wells. The company reported the best quarter in its history on Apr 28 as revenue rose 22% compared to the year ago quarter on strong ceramic proppant demand in the natural gas and liquids-rich plays such as Eagle Ford, Permian and the Bakken. Ceramic proppant demand is hot!
CARBO is the most expensive of our unknown stocks.
The company is a Zacks #1 Rank (strong buy). Shares took off in the last 8 months as the energy story heated up.
5. The Auto Retailer
Lithia Motors (LAD) has been selling automobiles since 1946 when its first retail store was opened in Oregon. Its retail stores now include 86 locations in 12 states. Left for dead by investors during the recession due to the near collapse of the auto industry, the company, which also sells used cars and provides maintenance, has rebounded.
In the first quarter, revenue soared 31.3% as new vehicle same store sales rose 41%, used vehicle same store sales jumped 17% and service/body and parts sales increased 8%. Its western markets are seeing the economic recovery.
Forward P/E: 12.2 PEG: 0.4 Expected EPS growth of 50.8%
Shares traded as low as $2.01 on March 9 before surging off the low. It hasn't been a straight up shot though. But if you held on through the ups and downs, its return is more than double the return on Apple's shares during the same period.
Don't Overlook the Unknown Companies
While there's nothing wrong with investing in the hot glamour stocks, if you widen your search beyond the well known names you might find a hidden gem that pays off just as big.
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her at twitter.com/traceyryniec.
Tens of millions of American families are about to go through economic hell and most of them don't even realize it. Most Americans don't spend a whole lot of time thinking about things like "monetary policy" or "economic cycles". The vast majority of people just want to be able to get up in the morning, go to work and provide for their families. Most Americans realize that things seem "harder" these days, but most of them also have faith that things will eventually get better. Unfortunately, things aren't going to get any better. The number of good jobs continues to decline, the number of Americans losing their homes continues to go up, people are having a much more difficult time paying their bills and our federal government is drowning in debt. Sadly, this is only just the beginning.
Since the financial collapse of 2008, the Federal Reserve and the U.S. government have taken unprecedented steps to stimulate the economy. But even with all of those efforts, we are still living in an economic wasteland.
So what is going to happen when the next wave of the economic crisis hits?
If you look at the economic relapse that’s going on right now, look at Friday’s abysmal job numbers, look at the housing numbers, understand that all of this is taking place with record monetary and fiscal stimulus. What happens if we remove those supports?
At the end of June, the Federal Reserve's quantitative easing program is slated to end. The U.S. Congress and state legislatures from coast to coast are talking about budget cuts. The amount of borrowing and spending that has been going on is clearly unsustainable, but will the U.S. economy start shrinking again once the current "financial sugar high" has worn off?
Already, all sorts of bad economic news has been coming out and all kinds of economic indicators are turning south. The American people are becoming increasingly restless. One new poll has found that59 percent of the American people disapprove of Barack Obama's handling of the economy (which is a new high). According to another recent poll, 63% of Americans say that they feel "not good" or "bad" about how the U.S. economy is performing.
If most Americans had good jobs, could afford their mortgages and could pay their bills, the economy would not be such a big issue.
Unfortunately, times are really tough for American families right now and they are about to get a lot tougher.
*Jobs*
The official unemployment rate just went up to 9.1 percent, but that figure only tells part of the picture.
There are some areas of the country where it seems nearly impossible to find a decent job. Millions of Americans have fallen into depression as they find themselves unable to provide for their families.
According to CBS News, 45.1 percent of all unemployed Americans have been out of work for at least six months. That is a higher percentage than at any point during the Great Depression.
Just two years ago, the number of "long-term unemployed" in the United States was only 2.6 million. Today, that number is up to 6.2 million.
Can you imagine being out of work for 6 months or more?
How would you survive?
Just look at the chart below. What we are going through now is really unprecedented. The average duration of unemployment in this country is now close to 40 weeks....
So will things get any better soon? Well, there were only about 3 million job openings in the United States during the month of April. Normally there should be about 4.5 million job openings. The economy is slowing down once again. Good jobs are going to become even more rare.
There are millions of other Americans that are "underemployed". All over the United States you will find hard working Americans that are flipping burgers or working in retail stores because that is all they can get right now.
Most temp jobs and most part-time jobs don't pay enough to be able to provide for a family. But there are not nearly enough full-time jobs for everyone.
Sadly, the number of "middle class jobs" is about 10 percent lower than a decade ago. There are simply less tickets to the "good life" than there used to be.
*Homes*
But without good jobs, the American people cannot afford to buy homes.
Without good jobs, the American people cannot even afford the homes that they are in now.
U.S. home prices have fallen 33 percent since the peak of the housing bubble. That is more than they fell during the Great Depression.
This decline in housing prices has caused a lot of problems.
28 percent of all homes with a mortgage in the United States are in negative equity at this point. There are millions of American families that are now paying on mortgages that are for far more than their homes are worth.
Millions of American families literally feel trapped in their homes. They can't afford to sell their homes, and if they simply walk away nobody will approve them for new home loans for many years to come.
Many Americans are sticking it out and are staying in their homes until they simply can't pay for them anymore.
As the number of good jobs continues to decline, the number of Americans that are losing their homes continues to rise.
If the economy slows down once again and millions more Americans lose their jobs this problem is going to get a lot worse.
*Bills*
Even if they aren't losing their homes yet, millions of other Americans families are finding it increasingly difficult to pay the bills.
Wages have been very flat over the past few years and yet the cost of most of the basics just seems to keep going up and up.
According to Brent Meyer, a senior economic analyst at the Federal Reserve Bank of Cleveland, the cost of food and the cost of energy have risen at an annualized rate of 17 percent over the past six months.
Have your wages gone up by 17 percent over the past six months?
As 2009 began, the average price of a gallon of gasoline in the United States was $1.83. Today it is $3.77.
American families are finding that their paychecks are going a lot less farther than they used to, but Ben Bernanke keeps insisting that we have very little inflation in 2011.
Most Americans don't care much about economic statistics - they just want to be able to do basic things like take their children to the doctor.
According to one recent survey, 26 percent of Americans have put off doctor visits because of the economy.
Sadly, soon a lot more American families will not be able to afford to go to the doctor.
According to one recent survey, 30 percent of all U.S. employers will "definitely or probably" quit offering employer-sponsored health coverage once Obamacare is fully implemented in 2014.
As the economic situation has unraveled, an increasing number of people are being forced to turn to the federal government for assistance.
So these days when American families can't feed themselves what do they do?
They turn to the federal government of course.
At the moment, approximately 44 million Americans are on food stamps.
But our federal government cannot afford to spend money like this forever.
According to a recent USA Today analysis, the U.S. federal government took on $5.3 trillion in new financial obligations during 2010. USA Today says that the U.S. government now has $61.6 trillion in financial obligations that have not been paid for yet.
Wow!
Who is going to end up paying that bill?
So with so much bad news, are our leaders alarmed?
Others are not so sure that everything is going to turn out okay.
Recently, James Carville warned that we could literally see rioting in the streets if the economic situation does not turn around soon. Just check out the last part of the video below....
The truth is that America is in decline. Just like with all of the great empires of the past, our empire is starting to crumble too.
A recent article in the Guardian touched on some of the reasons for America's decline....
The experience of both Rome and Britain suggests that it is hard to stop the rot once it has set in, so here are the a few of the warning signs of trouble ahead: military overstretch, a widening gulf between rich and poor, a hollowed-out economy, citizens using debt to live beyond their means, and once-effective policies no longer working. The high levels of violent crime, epidemic of obesity, addiction to pornography and excessive use of energy may be telling us something: the US is in an advanced state of cultural decadence.
The economic news is only part of the puzzle. This country has rejected the ancient wisdom that was passed down to us and we have rejected the principles of our founding fathers.
We have piled up the biggest mountain of debt in the history of the world and yet somehow we expected that everything would turn out okay.
Well, everything is not going to turn out okay.
All of this debt is going to come down on us like a ton of bricks and the U.S. economy is going to continue to fall apart. Millions of American families are going to lose their jobs and their homes.
Today's low volume gains came a day later than expected but it did leave bulls with options.
Best of the mix looks to be the semiconductor index. Semis closed with a small doji (bullish harami cross) right above its 200-day MA and along a line of support from the March swing low. Short and intermediate term stochastics are oversold.
The Nasdaq 100 closed at a minor support level of the April swing low. As with the semiconductor index, momentum is oversold. However, the 200-day and March reaction low are still some way off.
The S&P posted a low volume gain. The coming days may offer a more solid long play if early-buyers can squeeze shorts into a bear trap.
The Nasdaq is in a similar position, holding what was gap support from March.
The worry for bulls was the lack of volume associated with today's buying. If tomorrow can provide some impetus there may be enough to see a challenge of overhead 20-day MAs. A break, particularly in the semiconductor index, will likely keep buyers sidelined until 200-day MAs are tested. However, the semiconductor, having tested its 200-day MA, may not find its feet until down to November's 2010 swing low.
