Thursday, May 20, 2010

Stocks Threatening To Breakdown?

By: Lee Brodie
Producer

Both the Dow [.DJIA 10444.37 -66.58 (-0.63%) ] and S&P[.SPX 1115.05 -5.75 (-0.51%) ] continued their march lower Wednesday, again dragged down by fears that the crisis in Europe could quickly spread.

Germany's unilateral action to ban specific trades on some stocks and bonds sparked a fresh wave of selling with investors taking the move as a sign the European Union was not, in fact, unified.

"It's become increasingly clear that these are still separate countries with their own political agendas," says Kim Caughey of Fort Pitt Capital Group in a Reuters interview.

What must you know to trade this market?

S&P 500 INDEX
(.SPX)
1115.05 -5.75 (-0.51%%)
INDEX

Strategy Session with the Fast Money traders

The S&P found support around 1100, explains Pete Najarian, and it happened when the price of oil [CLC1 71.02 1.15 (+1.65%) ] turned higher. I liked that we rallied off the low. I wouldn’t say it makes me bullish but I found the action impressive.

My sources tell me institutions are taking risk off, Kaminksy adds. And it will stay that way at least through the summer. They feel that this isn’t the end of the crisis in Europe, it’s the beginning. Read more

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