Week-Long Consolidation Continues

Byinfo@50park.com
Gold- Bullish Double Bottom Pattern
Gold- Bullish Double Bottom Pattern

Thursday, February 09, 2012
Stock Market Commentary:

Stocks and a slew of other risk assets were relatively quiet on a rather busy news day. From our point of view, the major averages confirmed their latest rally attempt on Tuesday 1.3.12 which was Day 9 of their current rally attempt. It was also encouraging to see the S&P 500 break above its downward trendline and its longer term 200 DMA line. Looking forward, the S&P 500 has done a great job staying above its Q4 2011 high (~1292) and now has its sights set on its 2011, high near 1370. In addition, the bulls remain in control as long as the benchmark S&P 500 trades above 1292 and then its 200 DMA line.

Greece Agrees To Bailout Terms, ECB and BOE Meetings Barely Move Markets:

Investors digested a lot of earnings and economic data on Thursday. The big news was that Greece agreed to to the demanding terms of its second bailout package from the EU and the IMF. Separately, the Bank of England (BOE) and the European Central Bank (ECB) both concluded their latest meetings. The BOE injected (printed more money) $79.3 billion to boost their struggling economy. Meanwhile, the ECB held rates steady at 1% and made it clear that they are willing to take additional (and aggressive) steps to save the Euro, if needed. Finally, the Labor Department said jobless claims fell by 15,000 to a seasonally adjusted 358,000.

Market Outlook- New Rally Confirmed

Risk assets (stocks, FX, and commodities) have been acting better since the latter half of December. Now that the major U.S. averages scored a proper follow-through day the path of least resistance is higher. Looking forward, one can err on the long side as long as the benchmark S&P 500 remains above support (1292). Leadership is beginning to improve which is another healthy sign. Now that the 200 DMA line was taken out it will be important to see how long the market can stay above this important level. If you are looking for specific help navigating this market, feel free to contact us for more information. That’s what we are here for!

Similar Posts

  • Busy News Day; Quiet Reaction

    Byinfo@50park.com

    Market Action- Market In Confirmed Rally Week 20
    It was encouraging to see the bulls show up in November and defend the major averages’ respective 50 DMA lines. 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. Put simply, stocks are strong. Trade accordingly. If you are looking for specific high ranked ideas, please contact us for more information.

  • 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.

  • 6th Consecutive Weekly Decline

    Byinfo@50park.com

    Market Outlook- Market In A Correction:
    From our point of view, the market is back in a correction now that all the major averages closed below their respective 50 DMA lines and important upward trendlines. Since the beginning of May, we have urged our clients and readers to be extremely cautious as the major averages and a host of commodities began selling off.
    For those of you that are interested, the S&P 500 hit a new 2011 high on May 2, 2011. Two days later, on Wednesday, May 4, 2011, we turned cautious and said “The Rally Was Under Pressure” (read here). Then on Monday, 5.23.11, we changed our outlook to “Market In A Correction” (read here). On Monday June 6, 2011 we pointed out that the S&P 500 violated its 9-month upward trendline (read here) and reiterated our cautious stance. We have received a lot of “thank you” emails for being “spot on” in our cautious approach. We are humbled by your presence and very thankful for your continued support. Looking forward, the next level of resistance for the major averages is their respective 50 DMA lines then their 2011 highs. The next level of support is their longer term 200 DMA lines. 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!

  • Stocks Negatively Reverse After Encountering Resistance

    Byinfo@50park.com

    The major averages negatively reversed (opened higher and closed lower) after a the European Central Bank (ECB) held rates steady and disappointing economic data was released. Volume, an important indicator of institutional sponsorship, was mixed compared to Wednesday’s levels; higher on the NYSE and lower on the Nasdaq exchange. As a result, the NYSE indexes marked a distribution day as they fell on higher volume but the Nasdaq avoided one since volume receded.