29 Jul
Daily Market Commentary

Stocks Smacked As Debt Debate Continues

Friday, July 29, 2011
Stock Market Commentary:

Stocks ended lower this week as investors digested a slew of weaker-than-expected economic and earnings data and the debt stalemate continued in D.C.. It was disconcerting to see all the major averages slice and close below their respective 50 DMA lines in the final week of July which suggests the bears are getting stronger. Looking forward, the next level of support are the 2011 lows/the 200 DMA lines and the next level of resistance are the 2011 highs.

Monday-Wednesday- Stocks Smacked As Debt Deadline Approaches:

On Monday, stocks opened lower due to the ongoing debt saga in Washington D.C. However, the bulls showed up and quelled the bearish pressure after Republicans and Democrats prepared separate plans to raise the debt limit before the August 2, 2011 deadline. Moody’s, the popular rating agency, cut Greece’s debt rating further into junk territory which added to the downward pressure in equity markets across much of the developed world. As the political drama continues to unfold, a slew of companies are released their Q2 results this week. So far, over +80% of the S&P 500 companies that reported earnings topped estimates which bodes well for the ongoing economic recovery. Here is a short list of some of the high ranked/high profile companies that released their Q2 results in the final week of July: BIDU, AMZN, NFLX, GMCR, WFM, ACOM, POT, DECK, JAZZ, CRR, CLF, SRCL, BIIB, & TNAV. As always, in addition to analyzing the actual numbers we tend to focus on how a company (and the market) reacts to data.
On Tuesday, investors digested a slew of mixed earnings and economic data and continued to wait for a solution to the debt problem in D.C. Data on the Economic front was mixed to slightly positive. The S&P Case-Shiller index of U.S. home prices rose in May.  This was received well by the market and was the second consecutive monthly gain for domestic home prices. Meanwhile, a separate report showed that new-home sales slid -1% in June to an annual rate of 312,000. Economists like to see an average annual rate near 750,000 to be considered healthy. Finally, U.S. consumer confidence rose in July which bodes well for the economic recovery. The Conference Board said its index hit 59.5 in July which topped analyst estimates.
Stocks opened lower on Wednesday as the debt stalemate continued in D.C. and investors digested the latest round of tepid economic and mixed earnings data. On the economic front, durable goods orders slid -2.1% in June which was much lower than the Street’s forecast for a gain of +0.4%. A separate report from the Federal Reserve Bank of Chicago said manufacturing output in the Midwest region was weaker in June which does not bode well for the ongoing economic recovery. The Fed’s Beige Book showed that economic growth was moving forward at a very slow rate. Elsewhere, the political stalemate continued in D.C. which led many to question whether or not the U.S.’ AAA credit rating may be cut by one of the popular rating agencies. Moreover, investors are concerned what the ramifications of such a cut would mean for the global financial system.

Thursday-Friday’s Action: Stocks Smacked As Debt Stalemate Continues

Before Thursday’s open, the Labor Department said jobless claims fell by a seasonally adjusted -24,000 to 398,000 last week.  It was somewhat encouraging to see claims fall below –400,000 for the first time since April 2. In case you do not know, most economists view 400,000 as the dividing line between job growth and job contraction. So it will be interesting to see if this is a one off or the beginning of a new trend (stronger job growth). Earnings news was mixed, Crocs Inc. (CROX), Skechers USA (SKX), and Green Mountain Coffee (GMCR) all rallied while Exxon Mobil (XOM) and Akamai Technologies (AKAM) fell after releasing their Q2 results. After Thursday’s close, the House delayed a key vote to back Speaker Boehner’s latest plan which sent futures lower overnight. Stocks opened sharply lower after the government said Q2 GDP only rose +1.3% which fell short of the +1.8% forecast. It was also disconcerting to see first quarter’s GDP lowered to +0.4% from +1.9%.

Market Outlook- Market In A Correction

The latest action in the major averages suggests the market is back in a correction as all the major averages are flirting with their respective 200 DMA lines.  Our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. That said, the recent action suggests caution is paramount at this stage until all the major averages rally back towards their respective 2011 highs. If you are looking for specific help navigating this market, please contact us for more information.
 

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28 Jul
Daily Market Commentary

Stocks Quiet Ahead of GDP & House Vote!

Thursday, July 28, 2011
Stock Market Commentary:

Stocks were relatively quiet on Thursday after jobless claims topped estimates, the latest round of corporate earnings were announced, and the debt stalemate continued in D.C.. It is a bit worrisome to see the Nasdaq 100 negate its latest breakout and pull back along side the other major averages. Technically, the current rally is under pressure as all the major averages are pulling back towards their respective 50 DMA lines. The Dow Jones Industrial Average & benchmark S&P 500 index sliced and closed below their respective 50 DMA line which is not a healthy sign. Looking forward, the next level of support are the 2011 lows/the 200 DMA lines and the next level of resistance are the 2011 highs.

Debt Deadline Approaches, Economic Data & Earnings Help Stocks:

Before Thursday’s open, the Labor Department said jobless claims fell by a seasonally adjusted -24,000 to 398,000 last week.  It was somewhat encouraging to see claims fall below –400,000 for the first time since April 2. In case you do not know, most economists view 400,000 as the dividing line between job growth and job contraction. So it will be interesting to see if this is a one off or the beginning of a new trend (stronger job growth). Earnings news was mixed, Crocs Inc. (CROX), Skechers USA (SKX), and Green Mountain Coffee (GMCR) all rallied while Exxon Mobil (XOM) and Akamai Technologies (AKAM) fell after releasing their numbers. After Thursday’s close, the House is scheduled to vote on a Boehner’s latest plan, a slew of earnings are slated to be released, and Q2 GDP will be released before Friday’s open. It goes without saying, it will be a very ‘busy’ 24 hours.
Market Outlook- Rally Under Pressure
The latest action in the major averages suggests the current rally is under pressure. Our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. That said, the recent action suggests caution is paramount at this stage until all the major averages rally back towards their respective 2011 highs. If you are looking for specific help navigating this market, please contact us for more information.
 

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27 Jul
Daily Market Commentary

Stocks Smacked on Sour Debt, Economic, & Earnings Data

Wednesday, July 27, 2011
Stock Market Commentary:

Stocks were smacked on Wednesday after durable goods and the Fed’s beige book failed to impress, the debt stalemate in D.C. continued, and the latest round of earnings data was not thrilling. It is a bit worrisome to see the Nasdaq 100 negate its latest breakout and pull back along side the other major averages. Technically, the current rally is under pressure as all the major averages are pulling back towards their respective 50 DMA lines. The Dow Jones Industrial Average & benchmark S&P 500 index sliced and closed below their respective 50 DMA line which is not a healthy sign. Looking forward, the next level of support are the 2011 lows/the 200 DMA lines and the next level of resistance are the 2011 highs.

Debt Deadline Approaches, Economic Data & Earnings Fail To Impress:

Stocks opened lower on Wednesday as the debt stalemate continued in D.C. and investors digested the latest round of tepid economic and mixed earnings data. On the economic front, durable goods orders slid -2.1% in June which was much lower than the Street’s forecast for a gain of +0.4%. A separate report from the Federal Reserve Bank of Chicago said manufacturing output in the Midwest region was weaker in June which does not bode well for the ongoing economic recovery. The Fed’s Beige Book showed that economic growth was moving forward at a very slow rate.
Earnings data was mixed as a slew of large cap stocks released their Q2 results. Shares of Cisco System’s (CSCO) and Juniper Networks (JNPR) both gapped down after releasing their Q2 results. Meanwhile, Amazon.com (AMZN) and Boeing (BA) rallied after reporting solid Q2 results. Elsewhere, the political stalemate continued in D.C. which led many to question whether or not the U.S.’ AAA credit rating may be cut by one of the popular rating agencies. Moreover, investors are concerned what the ramifications of such a cut would mean for the global financial system.

Market Outlook- Rally Under Pressure

The latest action in the major averages suggests the current rally is under pressure. Our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. That said, the recent action suggests caution is paramount at this stage until all the major averages rally back towards their respective 2011 highs. If you are looking for specific help navigating this market, please contact us for more information.
 

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27 Jul
Media Quotes

Reuters Quote: Metals- Copper Ends Off As Econ Worries Trump Supply Woes

Wed Jul 27, 2011 2:41pm EDT
* Copper ends down as macro-economic jitters bite
* Escondida strike pressures already tight copper market
* Aluminium, tin hit multi-week highs
* Coming up: US jobless claims, pending home sales Thurs.
(Rewrites, adds New York dateline/byline, updates with New York closing
copper price, adds analyst comments)
By Chris Kelly and Silvia Antonioli
NEW YORK/LONDON, July 27 (Reuters) – Copper closed down on Wednesday as
a firmer dollar and macro-economic concerns continued to cloud near-term
demand prospects and limit the bullish impact of a prolonged strike at the
world’s largest copper mine.
 
It was another day of divergence in the base metals complex, with
aluminum CMAL3 extending a recent rally to its highest since early June
and tin CMSN3 reaching its priciest level since mid-May at $29,000 a
tonne.
 
With deadlocked debt talks in the United States, lingering debt
troubles in the euro zone, and another round of poor U.S. economic data,
copper’s supportive supply-side fundamentals seemed to move to the
back-burner, with investors more focused on demand implications from any
potential slowdown in the global economy.
 
“Demand seems to be the most important side of the equation for all capital markets right now due to the fact that you have several concurrent themes that could drastically cut demand,” said Adam Sarhan, chief executive of Sarhan Capital.
“If the debt situation is resolved swiftly and there is no demand destruction in the ramifications of the debt situation, then the focus is going to shift back to the supply side of the equation, and the strike will re-emerge as a leading force to drive copper prices.”
 
London Metal Exchange (LME) benchmark copper CMCU3 fell $40 to end at
$9,780 a tonne.
 
In New York, the key September COMEX contract HGU1 shed 3.15 cents to
settle at $4.4465 per lb.
 
The dollar rose against a basket of currencies .DXY, making
dollar-priced commodities costlier for holders of other currencies. [USD/]
Demand prospects dimmed after data showed new orders for long-lasting
U.S. manufactured goods fell in June and a gauge of business spending plans
slipped. [ID:nN1E76Q09V]
 
“Poor economic data this morning has the markets certainly moving to
the sidelines,” said David Bouckhout, senior commodity strategist with TD
Bank Financial Group.
 
As a result, trading volumes thinned out to a little more than 30,300
lots traded late in New York, down more than a third from the 30-day norm,
according to Thomson Reuters preliminary data.
 
 
But as a six-day strike at Chile’s huge Escondida mine showed no sign
of ebbing, copper’s downside risks looked limited, even as talks between
President Sebastian Pinera and unionists at state giant Codelco appeared to
ease the threat of contagion. [ID:nN1E76Q0UG]
 
“Analyst forecasts always build in at the beginning of each year supply
losses, and I think we are already at or close to exceeding those
forecasts,” said Evan Smith, co-manager of the U.S. Global Investors Global
Resources Fund (PSPFX) — a natural resources fund with about $900 million
in assets under management.
 
“If we start to see restocking in China or more labor disruptions or
weather disruptions to supply, the copper price will probably continue to
move sideways to higher.”
 
In a Reuters poll, analysts forecast the copper market will be in a
343,150 tonnes deficit in 2011. COMMODITYPOLL16 Some think supply
tightness may push copper prices up to record levels again.
 
“Although it may take a few attempts to break the $10,000 mark, we
expect copper prices to move above that level later in the year,” Credit
Suisse said in a note.
 
END OF DESTOCKING
Inventories of copper in LME-registered warehouses rose by 700 tonnes
to 469,800 tonnes, over a third higher than in December last year.
 
MCU-STOCKS
(Graphic: r.reuters.com/hub62s )
 
High stocks of copper in the last few months raised concerns over
reduced demand in top consumer China, where consumers were seen tapping
into their domestic stocks rather than importing more material, analysts
said.
 
But the destocking phase may be close to an end.
 
“Data for the first half as a whole strongly suggests destocking in a
number of the commodities, although the most recent monthly data points
suggest this destocking may be coming to an end,” Macquarie said in a
note.
 
“For both copper and aluminium…destocking was at its strongest over
the first four months of the year, with the May and June data implying that
the market has been either better balanced (aluminium) or that producers
have started tentatively rebuilding inventory (copper).”
 
Metal Prices at 1821 GMT
COMEX copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal            Last      Change  Pct Move   End 2010   Ytd Pct
move
COMEX Cu       444.40       -3.40     -0.76     444.70     -0.07
LME Alum      2644.00       -8.00     -0.30    2470.00      7.04
LME Cu        9779.00      -41.00     -0.42    9600.00      1.86
LME Lead      2690.00       15.00     +0.56    2550.00      5.49
LME Nickel   24395.00      295.00     +1.22   24750.00     -1.43
LME Tin      28745.00      145.00     +0.51   26900.00      6.86
LME Zinc      2522.00      -10.00     -0.39    2454.00      2.77
SHFE Alu     18310.00      295.00     +1.64   16840.00      8.73
SHFE Cu*     72810.00        0.00     +0.00   71850.00      1.34
SHFE Zin     19085.00      185.00     +0.98   19475.00     -2.00
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
(Editing by Keiron Henderson)
URL: http://www.reuters.com/article/2011/07/27/markets-metals-idUSL6E7IR0QE20110727
 
26 Jul
Daily Market Commentary

The Debt Waiting Game Continues

Tuesday, July 26, 2011
Stock Market Commentary:

Stocks were mixed for much of Tuesday as investors digested a slew of mixed earnings and economic data. It is very encouraging to see the Nasdaq 100 continue to lead its peers and remain perched near its 2011 high! Technically, it is encouraging to see the major averages find support and bounce off their respective 50 DMA lines in the middle of July. Looking forward, the next level of support are the 2011 lows/the 200 DMA lines and the next level of resistance are the 2011 highs.

Debt Deadline Approaches, Earnings & Economic Data Mixed:

On Tuesday, investors digested a slew of mixed earnings and economic data and continued to wait for a solution to the debt problem in D.C. Earnings news was mixed: NFLX, UPX, & MMM were among some of the large profile companies that fell after releasing their Q2 results. Alternatively, shares of BIDU, BRCM, & F traded higher after releasing their Q2 results.
Data on the Economic front was mixed to slightly positive. The S&P Case-Shiller index of U.S. home prices rose in May.  This was received well by the market and was the second consecutive monthly gain for domestic home prices. Meanwhile, a separate report showed that new-home sales slid -1% in June to an annual rate of 312,000. Economists like to see an average annual rate near 750,000 to be considered healthy. Finally, U.S. consumer confidence rose in July which bodes well for the economic recovery. The Conference Board said its index hit 59.5 in July which topped analyst estimates.

Market Outlook- Confirmed Rally

The last week of June’s strong action suggests the market is back in a confirmed rally. As our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. That said, the recent action suggests the rally is back in a confirmed rally as all the major averages are now flirting with fresh 2011 highs. Until all the major averages violate their respective 50 DMA lines on a closing basis, the market deserves the bullish benefit of the doubt. If you are looking for specific help navigating this market, please contact us for more information.
 

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25 Jul
Daily Market Commentary

Debt Deadline; To Be, Or Not To Be?

Monday, July 25, 2011
Stock Market Commentary:

Stocks opened lower due to the ongoing debt saga in Washington D.C. However, the bulls showed up and quelled the bearish pressure after Republicans and Democrats prepared separate plans to raise the debt limit before the August 2, 2011 deadline. It was very encouraging to see the Nasdaq 100 break out of its current multi month base and hit new 2011 high on Friday! Technically, it is encouraging to see the major average find support and bounce off their respective 50 DMA lines in the middle of July. Looking forward, the next level of support are the 2011 lows/the 200 DMA lines and the next level of resistance are the 2011 highs.

Debt Deadline, Greek Debt Cut (Again), & Earnings Continue In Droves!

On Monday, news spread that both Republicans and Democrats prepared separate plans to raise the debt limit and to avoid a technical default by next Tuesday. In Europe, Moody’s, the popular rating agency, cut Greece’s debt rating further into junk territory which added to the downward pressure in equity markets across much of the developed world. As the political drama continues to unfold, a slew of companies are slated to released their Q2 results this week. So far, over +80% of the S&P 500 companies that reported earnings topped estimates which bodes well for the ongoing economic recovery. Here is a short list of some of the high ranked/high profile companies slated to release Q2 results this week: BIDU, AMZN, NFLX, GMCR, WFM, ACOM, POT, DECK, JAZZ, CRR, CLF, SRCL, BIIB, & TNAV. As always, in addition to analyzing the actual numbers we tend to focus on how a company (and the market) reacts to data.

Market Outlook- Confirmed Rally

The last week of June’s strong action suggests the market is back in a confirmed rally. As our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. That said, the recent action suggests the rally is back in a confirmed rally as all the major averages are now flirting with fresh 2011 highs. Until all the major averages violate their respective 50 DMA lines on a closing basis, the market deserves the bullish benefit of the doubt. If you are looking for specific help navigating this market, please contact us for more information.
 

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22 Jul
Daily Market Commentary

Nasdaq 100 Surges To A Fresh 2011 High!

Friday, July 22, 2011
Stock Market Commentary:

Stocks ended the week higher after EU leaders announced a new bailout for their debt stricken nations and investors digested a slew of stronger-than-expected economic and earnings data. It was very encouraging to see the Nasdaq 100 break out of its current multi month base and hit new 2011 highs! Technically, it is encouraging to see the major average find support and bounce off their respective 50 DMA lines and positively reverse (open lower and close higher) for the week. Looking forward, the next level of support are the 2011 lows/the 200 DMA lines and the next level of resistance are the 2011 highs.
Monday-Wednesday’s Action: Stocks Bounce off Support!
On Monday, Treasury Secretary Timothy Geithner made it abundantly clear that if the U.S. were to default on its debt, the ramifications would be catastrophic. Over the weekend, U.S. lawmakers failed to reach a deal which caused investors to focus more on the August 2, 2011 deadline. U.S. economic data was light on Monday, home builders’ confidence rose slightly and topped estimates but remains weak from a historical perspective. The recent soft patch in the economy led Goldman Sachs (GS) to lower its forecast for real U.S. economic growth to +1.5% in the second quarter and +2.5% in Q3, down from +2% and +3.25%, respectively. However, all our anecdotal evidence points to a strong summer holiday season across the East Coast of the U.S. and Canada which, barring some unforeseen event, should bode well for Q3 GDP.
On Tuesday, housing starts topped estimates and jumped to the fastest pace in five months. The Commerce Department said work began at an annual rate of 629,000 houses which is up +14.6%from the prior month. This was the latest in a string of stronger-than-expected data from the ailing housing market. Hopefully, better days lie ahead for the ailing housing sector. Elsewhere, several high profiled companies released stronger-than-expected Q2 results which bodes well for the current rally. IBM &  Coca-Cola (KO) led the way higher when they reported solid Q2 results. Barring some unforeseen event, we are expecting another solid earnings season.
On Wednesday, the up and down ride continued for the ailing housing market. The National Association of Realtors said existing home sales slid -3.8% in May to an annual rate of 4.81 million. The year-on-year rate tanked to –15.3% from April’s negative -13.8% reading. The closely followed supply gauge rose to 9.3 months from April’s 9.0 months which is not ideal. It was somewhat encouraging to see the median home price rise +3.4% to $166,500. The Mortgage Bankers Association said mortgage applications jumped last week for the  largest increase in four months thanks in part to a flurry of refinancing and low interest rates. The IPO market remains encouraging with two high profile company’s topping estimates on Wednesday, Zillow (Z) and Skullcandy (SKUL) both began trading near the top end of their ranges which is encouraging.

SPX Perched Below Resistance

SPX Perched Below Resistance

Thursday & Friday’s Action: New EU Bailout Plan Lifts Stocks

Before Thursday’s open, the euro rallied smartly after Euro-zone leaders proposed a new aid package for Greece and restructured their closely followed rescue fund. The changes are designed to reduce the debt burdens of Greece, Portugal and Ireland and allow the European Financial Stability Facility (EFSF) to charge rates as low as 3.5%. The plan also extends the average maturity of the loans to 7.5-15 years.
In the U.S., the Labor Department said weekly jobless claims rose 10,000 to 418,000 which topped the Street’s estimate for 410,000. The data showed nearly 1,750 additional job cuts due to the Minnesota government shutdown. Stocks added to gains after Leading economic indicators in the U.S. and the Philly Fed survey rose +0.3. The major averages are on track to hit fresh 2011 highs which is a very healthy sign.  The latest round of earnings data topped estimates which is another encouraging sign for the market. Stocks were quiet on Friday as investors digested a slew of mixed earnings data. McDonald’s (MCD) jumped to a new all-time high after smashing estimates but Microsoft (MSFT), Honeywell International (HON), and Caterpillar (CAT) disappointed the Street.

Market Outlook- Confirmed Rally

The last week of June’s strong action suggests the market is back in a confirmed rally. As our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. That said, the recent action suggests the rally is back in a confirmed rally as all the major averages are now flirting with fresh 2011 highs. Until all the major averages violate their respective 50 DMA lines on a closing basis, the market deserves the bullish benefit of the doubt. If you are looking for specific help navigating this market, please contact us for more information.
 

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21 Jul
Daily Market Commentary

Stocks Rally On New EU Bailout!

Thursday, July 21, 2011
Stock Market Commentary:

Stocks rallied on Thursday after EU leaders announced a new bailout for their debt stricken nations. Technically, it is encouraging to see the major average find support and bounce off their respective 50 DMA lines this week. It is also encouraging to see the major averages on track for a positive reversal (open lower and close higher) for the week. Looking forward, the next level of support are the 2011 lows/the 200 DMA lines and the next level of resistance are the 2011 highs.

New EU Bailout Plan, Economic Data Helps Stocks, & Earnings Continue in Droves

Before Thursday’s open, the euro rallied smartly after Euro-zone leaders proposed a new aid package for Greece and restructured their closely followed rescue fund. The changes are designed to reduce the debt burdens of Greece, Portugal and Ireland and allow the European Financial Stability Facility (EFSF) to charge rates as low as 3.5%. The plan also extends the average maturity of the loans to 7.5-15 years.
In the U.S., the Labor Department said weekly jobless claims rose 10,000 to 418,000 which topped the Street’s estimate for 410,000. The data showed nearly 1,750 additional job cuts due to the Minnesota government shutdown. Stocks added to gains after Leading economic indicators in the U.S. and the Philly Fed survey rose +0.3. The major averages are on track to hit fresh 2011 highs which is a very healthy sign.  The latest round of earnings data topped estimates which is another encouraging sign for the market.

Market Outlook- Confirmed Rally

The last week of June’s strong action suggests the market is back in a confirmed rally. As our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. That said, the recent action suggests the rally is back in a confirmed rally as all the major averages are now flirting with fresh 2011 highs. Until all the major averages violate their respective 50 DMA lines on a closing basis, the market deserves the bullish benefit of the doubt. If you are looking for specific help navigating this market, please contact us for more information.
 

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20 Jul
Daily Market Commentary

Existing Home Sales & Stocks Fall

Wednesday, July 20, 2011
Stock Market Commentary:

Stocks were quiet on Wednesday as investors digested mixed economic data and AAPL’s strong quarterly results. Technically, it is encouraging to see the major average find support and stay above their respective 50 DMA lines. Looking forward, the next level of support are the 2011 lows/the 200 DMA lines and the next level of resistance are the 2011 highs.

Existing Home Sales Fall, IPO Market Is Strong, Earnings Are Mixed, & Debt Woes Continue!

The up and down ride continued for the ailing housing market. The National Association of Realtors said existing home sales slid -3.8% in May to an annual rate of 4.81 million. The year-on-year rate tanked to –15.3% from April’s negative -13.8% reading. The closely followed supply gauge rose to 9.3 months from April’s 9.0 months which is not ideal. It was somewhat encouraging to see the median home price rise +3.4% to $166,500. The Mortgage Bankers Association said mortgage applications jumped last week for the  largest increase in four months thanks in part to a flurry of refinancing and low interest rates.
The IPO market remains encouraging with two high profile company’s topping estimates on Wednesday, Zillow (Z) and Skullcandy (SKUL) both began trading near the top end of their ranges which is encouraging. On the political front, investors are looking forward to see lawmakers reach a deal to raise the debt ceiling and curb spending. In Europe, German Chancellor Angela Merkel met with French President Nicholas Sarkozy in Berlin ahead of another meeting of EU leaders to find a solution to Europe’s crushing debt woes.
Market Outlook- Uptrend Under Pressure:
The last week of June’s strong action suggests the market is back in a confirmed rally. As our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. That said, the current rally is under severe pressure as investors patiently await earnings season and continue to digest the latest economic data. Until all the major averages violate their respective 50 DMA lines on a closing basis, the market deserves the bullish benefit of the doubt. If you are looking for specific help navigating this market, please contact us for more information.
 

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19 Jul
Daily Market Commentary

Strong Housing & Earnings Lift Stocks!

Tuesday, July 19, 2011
Stock Market Commentary:

Stocks bounced nicely off their respective 50 DMA lines after a flurry of stronger-than-expected economic and earnings data was announced. It is important to note that all the major averages are back above their respective 50 DMA lines which is an encouraging sign. Looking forward, the next level of support are the 2011 lows/the 200 DMA lines and the next level of resistance are the 2011 highs.

Housing Starts & Earnings Top Estimates!

On Tuesday, housing starts topped estimates and jumped to the fastest pace in five months. The Commerce Department said work began at an annual rate of 629,000 houses which is up +14.6% from the prior month. This was the latest in a string of stronger-than-expected data from the ailing housing market. Hopefully, better days lie ahead for the ailing housing sector. Elsewhere, several high profiled companies released stronger-than-expected Q2 results which bodes well for the current rally. IBM &  Coca-Cola (KO) led the way higher when they reported solid Q2 results. Barring some unforeseen event, we are expecting another solid earnings season.

Market Outlook- Uptrend Under Pressure:

The last week of June’s strong action suggests the market is back in a confirmed rally. As our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. That said, the current rally is under severe pressure as investors patiently await earnings season and continue to digest the latest economic data. Until all the major averages violate their respective 50 DMA lines on a closing basis, the market deserves the bullish benefit of the doubt. If you are looking for specific help navigating this market, please contact us for more information.
 

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