HEWLETT PACKARD LEADS MARKET LOWER
HEWLETT BREAKING SUPPORT ON VOLUME... Hewlett Packard is suffering a technical breakdown today. Chart 1 shows the big computer maker falling under its February low (and its 200-day average) on heavy volume. [Notice also that it's recent low-volume bounce failed at its (blue) 50-day moving average].
Chart 1
LONGER RANGE VIEW... Chart 2 puts the recent action in better perspective. After forming a relatively small "double bottom" during last July and October, Hewlett reached the highs of last spring just above 20 before turning back down again. That has kept the stock in a broad year-long trading range. It's now heading down to challenge the peak set last August just near 15.50 and its mid-November low near 14.50.
Chart 2
TECHS DOWN...ENERGY UP... Thanks largely to Hewlett, technology stocks are pulling the rest of the market lower today. Once again, energy stocks are the biggest gainers. Crude oil prices have risen over $1.00 today. Rising oil prices are usually bad for the market. Gold prices are up a bit, as are bond prices. When bond prices rise, bond yields fall. We've pointed out many times the close correlation between bond yields and stock prices. The last two charts how how similar they look. The yield on the 10-year T-note bottomed during October and is now threatening its December low. The S&P 500 also bottomed during October and may also be headed toward its October low.
Chart 3
Chart 4
