This Day On The Street
Continue to site
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

S&P 500 Faces Do or Die Situation

NEW YORK ( TheStreet) -- As Pat Benatar once sang: "It's a do or die situation. We will be invincible." In my judgment, the S&P 500 is not invincible but is vulnerable unless today's close is above my semiannual risky level at 1566.9 and the October 2007 intraday high at 1576.09.

This could be the market's do or die situation.

As the song goes, "What are we waiting for? Won't anybody help us? What are we waiting for?" By now QE3 and QE4 should have had the S&P 500 above the 1566.9/1576.09 barriers. If not today, then the overvalued fundamentals and the overbought technicals could take over to show the downside risk.

As a warning the SPDR S&P 500 ETF Trust (SPY) tested its semiannual risky level at $156.59 on Thursday.

The stock market is operating under a reconfirmed Dow Theory Buy Signal with new closing highs for both Dow Industrials and Dow Transports set on Thursday at 14,539.14 and 6281.24 respectively. My concern about these series of signals is that the Dow 30 is underpinned by just 15 buy-rated stocks.

An even bigger warning comes from the underpinnings of the Dow Transportation Average, where there are no buy-rated stocks, eight hold-rated stocks, 11 sell-rated stocks and one strong sell-rated stock.

Here are the themes I focused on this week:

On March 11, I wrote Downgrading Two of Four 'Too Big to Fail' Banks, and investors and traders ignored this warning. Of the 24 bank stocks in the PHLX KBW Banking Index (BKX), only five have buy ratings and 19 have hold ratings. JPMorgan (JPM) and Wells Fargo (WFC) were downgraded to hold from buy.

On Tuesday, FDIC Data Shows Stressed Community Banks I profiled 24 community banks that had overexposures to CRE loans in Q3 2012, and in Q4 2012, only one alleviated this condition. The ValuEngine source of data had one error that I am correcting today. Sterling Bank (STSA) incorrectly showed a "1-Engine" rating, when it should have had a "4-Engine" buy rating. STSA has gained 3.7% over the last twelve months. One data point from our third party vendor had a negative sign instead of a positive sign. We fixed the error and now five of the 24 community banks are rated buy, 19 are rated hold.
1 of 3

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
Only $9.95
14-Days Free
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
SYM TRADE IT LAST %CHG
AAPL $121.30 0.00%
FB $94.01 0.00%
GOOG $625.61 0.00%
TSLA $266.15 0.00%
YHOO $36.67 0.00%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs