Stocks Fall As Investors Digest Economic & Earnings Data

Byinfo@50park.com

Wednesday, October 19, 2011
Stock Market Commentary:

Stocks confirmed their latest rally attempt on Tuesday day 12 of their rally attempt when the S&P 500 and NYSE composite scored proper follow-through days (FTD).  It is important to note that every major rally in history began with a FTD but not every FTD leads to a new rally. That said, one can proceed with caution as long as the major averages remain above their 50 DMA lines. The next important area of resistance is their September highs and then their 200 DMA lines. We would be remiss not to note that several key risk assets (multiple stock markets around the world, Copper, Crude Oil, etc.) officially entered bear market territory over the in recent months which bodes poorly for U.S. stocks and the global economy.

Want To Make Money In An Up or Down Market?
Save over 50%
www.FindLeadingStocks.com

Earnings Mixed, EU Leaders Meet, and Economic Data Does Not Disappoint:

Stocks were relatively quiet on Wednesday as investors digested a slew of earnings and economic data. The latest round of earnings were mixed which has yet to give investors a clear “tell” on how Q3 earnings season will play out. The “big” earnings miss was from tech-giant Apple Inc. (AAPL). This was their first EPS miss since 2004 and was largely due to weaker-than-expected iPhone sales. The company sold 17m iPhones last quarter which was shy of the 20m expected on Wall Street. However, sales of their new iPhone 4s has reached record numbers which means that most people were simply waiting for the new iPhone 4s to come out before upgrading their phone, not that the iPhone has fallen from grace. In other news, an informal meeting between French President Nicolas Sarkozy, Germany’s Angela Merkel, ECB president Jean-Claude Trichet and IMF chief Christine LaGarde will be held ahead of this weekend’s much-anticipated EU summit in Brussels.

Economic news was relatively positive in the U.S.. The Commerce Department said housing starts jumped by +15% in September to a seasonally-adjusted rate of 658,000 units which was the fastest annual rate in 17 months and easily topped the Street’s estimate for 590,000. Elsewhere, the consumer price index (CPI) did not spark inflation woes. The consumer price index in September rose +0.3% which matched estimates. Meanwhile, core prices which exclude food and energy, rose by +0.1% which fell short of the Street’s estimate for +0.2%. Finally, the Fed’s Beige Book was released which caused mild selling on Wall Street.

Market Outlook- Confirmed Rally:

The major U.S. averages are back in a new confirmed rally and are flirting with resistance of their current 2.5 month base. The benchmark S&P 500 index scored a proper FTD on Tuesday, October 18, 2011 when it rallied over 2% on heavier volume than the prior session. The next important area of resistance is September’s highs and then the 200 DMA line. In addition, it is important to note that the bulls scored a victory since many of the major averages closed above their downward sloping 50 DMA lines for the first time since late July! Our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. If you are looking for specific help navigating this market, please contact us for more information.

Fall Sale- We Will Double Your Order!!!
Limited-Time Offer!
www.FindLeadingStocks.com

 
On Tap This Week:
WEDNESDAY: Weekly mortgage apps, CPI, housing starts, Fed’s Rosengren speaks, oil inventories, Fed’s Beige Book; Earnings from Morgan Stanley, Travelers, United Tech, AmEx, Ebay, Western Digital

THURSDAY: Jobless claims, existing home sales, Philadelphia Fed survey, leading indicators, Fed’s Bullard and Kocherlakota speak, NewsCorp investor day; Earnings from AT&T, Eli Lilly, Nokia, AutoNation, Microsoft, Capital One, Chipotle and SanDisk

FRIDAY: Fed’s Kocherlakota speaks, 2011 Dodd-Frank Rulemaking Deadline; Earnings from GE, McDonald’s, Verizon, Honeywell and Schlumberger
Source: CNBC.com

Similar Posts

  • Markets Smacked In Wake Of Fed Meeting

    Byinfo@50park.com

    Thursday, September 22, 2011 Stock Market Commentary: Nearly every major capital market (equities, euro, crude oil, gold, copper, etc…etc..) was smacked on Thursday in the wake of the Fed’s meeting. Nearly every day since mid-August, we told you that the major averages were simply rallying (on light volume) towards resistance (50 DMA line) and unless…

  • Stocks Fall As Investors Digest A Slew Of Economic Data

    Byinfo@50park.com

    Stocks closed lower as investors digested a slew of economic data. Volume, a critical component of institutional demand, was mixed compared to Monday’s levels; higher on the Nasdaq and lower on the NYSE. The higher volume on the Nasdaq marked a distribution day for that exchange but the lower volume on the NYSE helped those indexes avoided that fate. Decliners led advancers by over a 21-to-17 ratio on the NYSE and by over a 16-to-11 ratio on the Nasdaq exchange. There were 12 high-ranked companies from the CANSLIM.net Leaders List making a new 52-week high and appearing on the CANSLIM.net BreakOuts Page, higher from the 41 issues that appeared on the prior session. In terms of new leadership, it was encouraging to see new 52-week highs outnumber new 52-week lows on the NYSE and Nasdaq exchange.

  • Flurry of M&A News Lifts Stocks

    Byinfo@50park.com

    Tuesday, August 17, 2010
    Stock Market Commentary: The technical action in the major averages is not ideal. Currently, resistance for the Dow Jones Industrial Average is its 200 DMA line, while the Nasdaq composite faces resistance at its 50 DMA line. Meanwhile, the benchmark S&P 500 index managed to close above its 50 DMA line but still faces resistance near its 200 DMA line (1,116) and then its prior chart highs near 1,131. The action in leading stocks remains questionable at best which is another disconcerting sign. Tuesday’s action does not change our cautious outlook. Put simply, we can expect this sideways/choppy action to continue until the market breaks out above resistance or below support (recent chart lows). The first scenario will have bullish ramifications while the second will be clearly bearish. Trade accordingly.

  • Stocks React To Earnings & FOMC Minutes

    Byinfo@50park.com

    Market Outlook- Rally Under Pressure
    From our point of view, the market rally is under serious pressure which suggests caution is paramount at this juncture. Looking forward, the next level of support for the major averages are their respective 50 DMA lines and resistance is their 2011 highs. The rally remains in tact as long as support holds on a closing basis. If you are looking for specific help navigating this market, please contact us for more information.
    Want Better Results?
    You Need Better Ideas!
    We Know Markets!
    Learn How We Can Help You!

  • Mubarak Steps Down; Stocks Enjoy Another Strong Week!

    Byinfo@50park.com

    Market Action- Confirmed Rally; Week 24 Ends
    It was encouraging to see the bulls show up and defend the major averages’ respective 50 DMA lines in November as this market proves resilient and simply refuses to go down. From our point of view, the market remains in a confirmed rally until those levels are breached. The tech-heavy Nasdaq composite and small-cap Russell 2000 indexes continue to lead evidenced by their shallow correction and strong recovery. However, it is important to note that stocks are a bit extended here and a pullback of some sort (back to the 50 DMA lines) would do wonders to restore the health of this bull market. If you are looking for specific high ranked ideas, please contact us for more information.