Rally Under Pressure

Byinfo@50park.com

Wednesday, May 04, 2011
Stock Market Commentary:

Stocks fell for the third consecutive day after ADP released a weaker-than-expected April employment report. From our vantage point, the market rally is under pressure due to the lackluster action in the major averages and so many leading stocks.

ADP Jobs Report Misses Estimates:

On Wednesday, stocks got smacked after ADP, the country’s largest private payrolls company, said U.S. employers added +179,000 in April which missed the Street’s forecast of +198,000. The tech-heavy Nasdaq composite negated its latest breakout and the S&P 500 is currently flirting with its prior chart highs (1344). Looking forward, the next level of support for the major averages and a slew of leading stocks is their respective 50 DMA lines.

Market Outlook- Rally Under Pressure

From our point of view, the market rally is under pressure which suggests caution is paramount at this stage. We would be remiss not to note that a slew of  leading stocks suffered heavy distribution earlier this week which is not ideal. If you are looking for specific help navigating this market, please contact us for more information.

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    Market Outlook- Rally Under Pressure
    The major averages confirmed their latest rally attempt on Tuesday, August 23, 2011 which was the 11th day of their latest rally attempt. It is important to note that all major rallies in history began with a FTD however not every FTD leads to a new rally (i.e. several FTDs fail). In addition, it is important to note that the major averages still are under pressure as they are all trading below their longer and shorter term moving averages (50 and 200 DMA lines) and are all still negative year-to-date. Our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. This rally will fail if/when several distribution days emerge or August’s lows are breached. Until then, the bulls deserve the benefit of the doubt. If you are looking for specific help navigating this market, please contact us for more information.