P3 Sees Stock Market Running Out of Gas

FOR IMMEDIATE RELEASE
Tampa, Florida, United States of America (Free-Press-Release.com) May 20, 2011 -- FOR IMMEDIATE RELEASE -- May 20, 2011 -- Tampa, Florida USA -- It is Time to be VERY CAREFUL with the market.

The S&P has risen over 100% in the last two years since the market bottom in March ’09. In fact, since the start of the now infamous QE2 last summer, the market is up over 25%.

The investment climate has now started to change…since mid-February the S&P 500 has made several moves but the averages are in the exact same place. So far this year, the NASDAQ has had four advances but they were all in the 4% to 8% range. All of the down moves have been in the 3% to 8% range. Up or down, the moves have lasted only two or three weeks making it a very tough market to make money in.

Cracks are starting to show…

1)Summer is a seasonally weak period for stocks.

2)QE2 is due to come to an end on June 30th, less than 6 weeks away. The Fed has pumped over 600 billion dollars into the system which has obviously been a very positive shot- in- the- arm for the stock market. What do you think the stock market will do when this liquidity stops?

3)Commodities have dropped hard with Silver down 29% in just 5 days and the entire agriculture complex and oil down over 10%. Is this a sign that world economies may be slowing?

4)Emerging markets have all dropped over the last two weeks and have made little or no progress since November.

5)Treasury Bonds are now in a new uptrend and hit a 5-month high just this week. For the last two years the stock market and the bond market have had a near perfect inverse relationship. The bonds began dropping in price last August and the market has rallied straight up since then while the bonds went straight down. The bonds quit dropping in February and have risen steadily since that point and the market has not made any progress since.

6)There are major negative divergences when looking at the stock market in relation to its RSI and MACD. Also stocks above their 50 day moving averages and 200 day moving averages have rolled over and are headed lower. The stock market is now losing serious momentum.

7)Many leading stocks and huge winners over the last two years have started to break down on heavy volume (this means institutions are selling). Examples to look at are AAPL, BIDU, OPEN, and PCLN.

8)Market tops take time to form and eventually roll over and turn into major corrections or just maybe a new bear market. We will let the Wall Street guru’s and pundit’s guess which is coming next…

We continue to believe we are in a bull market and any correction that unfolds should be an opportunity to look for new leading stocks that hold up well (show relative strength) during the correction.

Monitor your current stock positions and follow your moving averages looking for sell signals to exit any position that shows too much weakness and an increase in down side sell volume.

Remember, at times like these when the market is labored and good stocks begin to fall, the #1 priority is to protect your investment capital. Do not let greed or laziness turn a profitable position into a loss and don’t let current losing positions ruin your portfolio.

Invest Safely – P3
MARC

Marc Barhonovich
P3 Money Management

Marc@P3MoneyManagement.com
3837 Northdale Blvd. Suite 194
Tampa, FL 33624
Ph: 813-265-9274
Fax:813-960-0270
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More information can be found online at http://www.p3moneymanagement.com

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