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.
 

Stock Market Research?

Global Macro Research?

Want To Follow Trends?

Learn How We Can Help You!

 

Similar Posts

  • Stocks Slide As Global Recovery Slows

    The technical action in the major averages has deteriorated significantly. Not all of the major averages managed to rally above their recent chart highs, and all have now sliced back below their respective 200-day moving average (DMA) lines. It is also worrisome to see the number of distribution days pile up in recent weeks which puts pressure on the current five-week rally. Whenever a market rally becomes under pressure (as it is now), it is usually wise to err on the side of caution and adopt a strong defensive stance until the bulls regain control. Trade accordingly.

  • Stocks Score A FTD, New Rally Confirmed!

    The Nasdaq composite confirmed its latest rally attempt and produced a sound FTD which means the window is now open to begin buying high-ranked stocks again. Technically, it was encouraging to see the Dow Jones Industrial Average and the benchmark S&P 500 index close above their respective 200 DMA lines. However, the fact that volume receded compared to the prior session prevented the DJIA and S&P 500 from scoring a proper FTD.
    At this point, the S&P 500 is down -8.5% from its 19-month high of 1,219 and managed to close above resistance (200 DMA line) of its latest trading range. Looking forward, the 200 DMA line should now act as support as this market continues advancing. Remember to remain very selective because all the major averages are still trading below their downward sloping 50 DMA lines. It was also disconcerting to see volume remain suspiciously light behind Tuesday’s move. It is important to note that approximately +75% of FTD’s lead to new sustained rallies, while +25% fail. In addition, every major rally in market history has begun with a FTD, but not every FTD leads to a new rally. Trade accordingly.

  • Stocks End Higher On Light Volume

    Thursday, March 11, 2010 Market Commentary: The major averages edged higher after China said inflation jumped last month and mixed economic data was released. Volume totals were reported lower than the prior session on both major exchanges. Advancers led decliners by a 23-to-15 ratio on the NYSE and by nearly a 15-to-11 margin on the Nasdaq exchange. There were 35 high-ranked companies from the CANSLIM.net Leaders List that made…

  • Quiet Start To 1st Full Trading Week of 2012

    Monday, January 09, 2012 Stock Market Commentary: Stocks and a slew of other risk assets were quiet as investors waited for earnings season to officially begin. Investors are hopeful that 2012 will be a better year for U.S. equities and risk assets than 2011 or 2010. From our point of view, the major averages confirmed their latest…