Is the big 2013 rally peaking?

Maybe. The S&P 500 has been unable to push through to new highs. There are worries again about Europe, and Oracle's earnings weighed on investors.

By Charley Blaine Mar 21, 2013 5:35PM
Wait a minute: What's happening to the stock market rally? It's possible that it is peaking. It happens.

It may be peaking in part because global markets are worried, yet one more time, about Europe and the euro. The Cyprus crisis is making things a little hairy -- because of fears that a run on Cyprus' banks will set off runs on banks in Italy, Spain and elsewhere. So far that hasn't happened, but that hasn't stopped the fretting.

The rally could also be peaking because it's mid-March, and the market tends to slump in the spring. And it's peaking because it looks a bit overbought.
All that said, the Standard & Poor's Index ($INX) fell 13 points to 1,546 on Thursday. The index is down some 19 points from its 2013 high of 1,563.23, set on March 15. That close, in turn, was just roughly 2 points below its all-time closing high of 1,565.15, set on Oct. 9, 2007.

The Dow Jones industrials ($INDU) were down 90 points to 14,421. The Nasdaq Composite Index ($COMPX) dropped 32 points to 3,223. The major indexes' losses were their worst since Feb. 25.

It's the S&P 500 that's got our attention. That 2007 all-time closing high has emerged as a strong resistance point. Every time the index closes in on 1,565, sellers take profits.

Maybe it's because of Cyprus. Maybe it's because 85% of the stocks in the index are trading above their 200-day moving averages. Historically, every time that percentage moves above 80%, it sets the stage for a pullback. Not right away, but within a few weeks.

Lastly the relative strength indexes of the major indexes recently hit levels that cried out, "Pullback!" These measure momentum, and when they top 70, the odds of a sell-off increase. The S&P 500 and Dow topped 90 on March 15. They ended Thursday at 65 and 74, respectively.

The obvious question is, then, if the market is peaking, what does that mean? There is not a clear picture yet. Bears are convinced Europe and/or China will sink the global economy.

Bulls believe the S&P 500 will push to new highs in 2013. The question is when: now or later on. Meanwhile, U.S. economic trends have been gaining strength, especially real estate and automotive. The jobs picture looks to be improving; jobless claims are at levels not seen since early 2008.

And don't forget the the Federal Reserve. The central bank, as Chairman Ben Bernanke said Wednesday, is in no rush to start raising rates -- because it worries about Europe and recent softness in domestic manufacturing.

The market weakness on Thursday was concentrated in materials, financial and technology stocks.

Oracle (ORCL) was off $3.47 to $32.30, its worst one-day loss in a couple of years. It was the worst performer among S&P 500 stocks and stocks in the Nasdaq-100 Index ($NDX). Blame a big earnings miss, reported late Wednesday, which the company attributed to a weak performance by its sales team. The Nasdaq-100 was off 31 points to 2,775.

Add to that slides by networking companies Cisco Systems (CSCO) and Juniper Networks (JNPR) after a downgrade. Cisco was the weakest of the 30 Dow stocks, but its decline also affected Hewlett-Packard (HPQ) and IBM (IBM).

Airgas (ARG) was the second-worst S&P 500 performer after Oracle. Chemical companies Eastman Chemical (EMN) and FMC Corp. (FMC) were also among the 10 worst performers.

Yahoo (YHOO) and BMC Software (BMC) were the Nasdaq-100 leaders. Yahoo jumped after an upgrade.

More on Top Stocks
34Comments
Mar 21, 2013 7:50PM
avatar
The rally better not be peaking!  Bernanke is still pumping $85 billion in every month.  If we top out  now while he's still doing that, imagine what will happen when he finally stops.
Mar 21, 2013 6:22PM
avatar
Is the 'rally' peaking? Hmmmm?  Depends on what sector you've placed money on? Reits, oil & gas, defence, telecom, banks (gasp)....etc. Frankly Scarlet...it's a crap shoot.
Mar 21, 2013 8:48PM
avatar
If your smart, and not greedy, invest in stocks that pay a dividend, like utitlies. Those stocks don't move much, up or down. If your new to investing...go the DRIP route....you buy more shares with your dividends, at no cost to you. Then when you get older....change it to receive the dividends....it worked for me.....it's not a get rich quick thing...but it works. If you try to time the market or get rich....lol...well...you WILL get burned.
Mar 21, 2013 9:58PM
avatar
For every action there is an equal and opposite reaction. You pump, something dumps. There never was a "bull run" or "rally" just over-filling a fragile glass. When it breaks, no amount of glue will re-assemble it. So... protect the glass or kiss your asss good-bye. Quit drinking Kool Aid.
Mar 21, 2013 7:56PM
avatar

Yup it all depends, on what and where you are invested....?

And then we could run out the banner...How much ?....Everyone has a limit...

Not everyone has great ideas..

But mindsets, mean a lot..

Mar 21, 2013 6:51PM
avatar
Wait until the far left and their Satanic leader Obama get their Odumbocare in full swing next yr and lets just see how all these lefties like paying high.......and i do mean high healthcare costs.  It's going to be so fun to watch all the nut jobs that voted for him go crazy when they see the sticker shock...but they will.......oh, they will.  The unions already having a cow now when they found out they were going to have to pay more after they voted him back in.  Remember, Obama followers...as maw-maw Pelosi told us we have to pass it to know whats in it. lol  We are now finding out  and it's not what they thought it would be.  The Dems will get killed in 2 yrs for this once this goes into full swing.
Mar 21, 2013 9:44PM
avatar

Usually don't pay to get Greedy, when investing...

 

But slow and steady....DOESN'T always win the race either. Sometimes..?

 

But running for the exts....Hardly ever pays long term..

And many had trouble understanding that...imo.

Be it Fear or Greed....Middle of the Road, has it's rewards.

Mar 22, 2013 7:49AM
avatar
So what?

Got a few $$$ to invest, if the market takes a break (the more the better) I'll use that to invest a little more.


Mar 22, 2013 1:28PM
avatar
Dow to 15,500 by the end of the year.
Mar 21, 2013 7:52PM
avatar
Here all the time.....I thought Biden, was the "Barney Fife."....???
Mar 22, 2013 10:58AM
avatar
Stock market bubbles, and mini-bubbles, such as the one ongoing now, will always occur even though experience and common sense say that we should well learn from the last one not to do the next one.

Why don't we learn? Because the people in later bubbles are not the same people who were in the earlier bubbles who well learned not to do it again, as all people always will learn 99.9% of their lessons in life from their own personal experiences, and are unwilling or unable to learn well from others'  experiences and mistakes. They always "think" that this time will be different. That is called.....hope.That is why we still make the same dumb mistakes we have always made as a species and will always continue to do so. The special ones who can and do learn well from others' experience mistakes are the true pioneers of human species progress, but they are too few to make a significant positive difference. And getting fewer.
Mar 21, 2013 8:14PM
avatar
If Biden is Barney Fife, then Obama must be Goober, or maybe Gomer.  We have yet to find and elect our "Andy".
Mar 21, 2013 9:35PM
avatar

Our "Andy" was elected about  1992....We just called him Bubba....

 

Or his momma called him William Jefferson.

Mar 21, 2013 6:10PM
avatar

Do you notice the bears are right wingers?It`s no secret the far right would love to see

a depression.Hotdogs like Rubio would be quick to blame Obama.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

118
118 rated 1
270
270 rated 2
472
472 rated 3
714
714 rated 4
624
624 rated 5
608
608 rated 6
623
623 rated 7
445
445 rated 8
319
319 rated 9
125
125 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
ATVIACTIVISION BLIZZARD Inc10
BIDUBAIDU Inc10
BMYBRISTOL-MYERS SQUIBB CO.10
CELGCELGENE CORP10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.