This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Spring Slide in Full Swing

NEW YORK ( TheStreet) -- It has been 410 years since the first initial public offering (IPO). The Dutch East India Company helped people add spice to their daily lives, connect to those in faraway places, and became the richest company the world had ever seen. High hopes for similar success surrounded the Facebook (FB) IPO on Friday. However, the long-awaited IPO was unable to spur enthusiasm among stock market investors. Stocks posted the worst week in six months as the S&P 500 fell 4.3%, making three straight weeks of declines culminating in an 8.7% decline from this year's peak in April.

In each of the past two years, the stock market began a slide in the spring, a phenomenon often referred to by the old adage "sell in May and go away," which lasted well into the summer months. In both 2010 and 2011, an early run-up in the stock market, similar to this year, pushed stocks up about 10% for the year by mid-April. On April 23, 2010 and April 29, 2011, the S&P 500 made peaks that were followed by 16% to 19% losses that were not recouped for more than five months.

On March 26, we published the 10 indicators that warned of another Spring Slide this year but noted that this year's decline may not be as steep as in the prior years. Now that the Spring Slide is in full swing, we have to watch out for the big event with the potential to make it as severe as the past two years.

A combination of factors contributed to the reversal in direction for the stock market, including an extended and exhausted rally, a slowdown in the economy, and weakening earnings outlooks. But what added fuel to the decline in 2010 was the negative environment that included the end of the Fed's QE1 stimulus program, the uncertainty around the impact of the Dodd-Frank legislation, the passage of the Affordable Care Act, the Eurozone debt problems and bailouts, central bank rate hikes, and the end of the homebuyer tax credit.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $126.12 2.30%
FB $82.70 -0.72%
GOOG $547.45 -0.16%
TSLA $191.51 3.50%
YHOO $44.93 -0.38%

Markets

DOW 17,890.79 -85.52 -0.48%
S&P 500 2,086.24 +25.22 1.22%
NASDAQ 4,947.4410 +56.2220 1.15%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs