Market Wrap – week ending 5/16/2014

This is going to be a quick one this time since … yet again not much has changed our cautious outlook since last week’s alert.

The Nasdaq and smaller caps are still in the doldrums, ALTHOUGH the Nasdaq is respecting its’ most recent low that was made about a month ago.  The smaller cap stocks are not looking as good though … making a new low yesterday.  Both indexes are clearly still struggling.

The larger caps are still holding up well.  Although the S&P has yet to make any money since late February, it also hasn’t lost any.   The Dow tells a similar story, not making a dime for 2014, but also not losing any either.  This lack of selling on the larger caps is certainly a good sign so far, we see lots of larger issues consolidating the gains of 2013 and doing what is called ‘base building’ which is a healthy ‘time-out’ for the market. 

Any time the market goes sideways for long periods of time is generally a sign that rebuilding is occurring and usually that leads to more upside for the market, so although I don’t think the market is quite done repairing itself, I do like how it is acting these days.

As I’ve mentioned in the past, we certainly need the smaller caps and leading stocks to participate in any upcoming rally attempt and so far they are not cooperating. 

For now, we continue to wait and watch for signs of strength in the coming week. We might have already put in the bottom of this correction OR are close to a bottom at this time, but acting cautiously still is the best course of action.

Hope you have a wonderful and safe weekend.

Respectfully,

Randall Mauro

Resnn Investments, LLC