Monday, November 7, 2011 Stock Market Commentary: Stocks rallied on Monday as fears shifted from Greece to Italy regarding the next European domino to fall. From our point of view, the current EU bailout plan- to use leverage & add more debt to a debt crisis- is foolish at best and does not address the broader…
Market Outlook- Rally Under Pressure:
The current rally is under pressure due to the recent severe sell off that sent the SPX below 1230 and erased half of October’s gains. This means that caution is king until the bulls regain control of this market. In addition, it is important to note that the bulls failed to send the major averages above their respective 200 DMA lines and the neckline of their ominous head-and-shoulders top pattern (1250) in late October. We have to expect this sloppy, wide and loose action to continue until that level is repaired and higher prices follow. 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.
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Market Outlook- Rally Under Pressure:
The current rally is under pressure due to the recent severe sell off that sent the SPX below 1230 and erased half of October’s gains. This means that caution is king until the bulls regain control of this market. In addition, it is important to note that the bulls failed to send the major averages above their respective 200 DMA lines and the neckline of their ominous head-and-shoulders top pattern (1250) in late October. We have to expect this sloppy, wide and loose action to continue until that level is repaired and higher prices follow. 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.
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“Even if Greece is off the table and this referendum passes, it doesn’t resolve any of Europe’s broader issues, i.e., the rest of the PIGS countries are broke,” said Adam Sarhan, chief executive of New York-based Sarhan Capital, using an acronym for Portugal, Italy, Greece and Spain.
“That is the underlying problem which is weighing on the markets collectively, from copper to equities … Nothing that was addressed last week even scratches the surface dealing with their debt.”
Market Outlook- Rally Under Pressure:
The current rally is under pressure due to the recent severe sell off that sent the SPX below 1230 and erased half of October’s gains. This means that caution is king until the bulls regain control of this market. In addition, it is important to note that the bulls failed to send the major averages above their respective 200 DMA lines and the neckline of their ominous head-and-shoulders top pattern (1250) in late October. We have to expect this sloppy, wide and loose action to continue until that level is repaired and higher prices follow. 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.
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Market Outlook- Rally Under Pressure:
The current rally is under pressure due to the recent severe sell off that sent the SPX below 1230. This means that caution is king until the bulls regain control of this market. In addition, it is important to note that the bulls failed to send the major averages above their respective 200 DMA lines in late October. 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.
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Market Outlook- Confirmed Rally:
The major U.S. averages are back in a new confirmed rally and broke above the mid-point/resistance of their 6-week bullish double bottom base. The benchmark S&P 500 index scored a proper FTD on Tuesday, October 18, 2011, i.e. Day 12, when it rallied over 2% on heavier volume than the prior session. 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.
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Monday-Wednesday’s Action: Stocks Successfully Test Support!
Over the weekend, EU leaders kicked the can down the road and reschedule yet another meeting on Wednesday to tackle their onerous debt levels. Elsewhere, shares of Catepillar Inc. (CAT) gapped up after topping Q3 estimates and raised their 2012 forecasts. The news on the M&A front was healthy- shares of RightNow Technologies (RNOW) and Healthspring Inc. (HS) gapped up after agreeing to be acquired on Monday.
Stocks fell on Tuesday and turned negative for the week as investors digested the latest round of lackluster earnings and EU leaders kicked the can down the road. Since 2008, we have been telling clients that is impossible to solve a debt crisis with more debt! However, the cognoscenti feel otherwise and as always we shall let the markets guide us.The news from the economic front was less than stellar. Consumer confidence in the U.S. unexpectedly fell in October to the lowest level since March 2009, during the “Great Recession.” Separately, the S&P Case/Shiller index of home prices in 20 major U.S. cities fell and missed estimates in August which reiterates how weak the housing market is right now.
Stocks bounced off support (SPX 1230) on Wednesday after Germany passed a plan to expand the EU bailout measure. In the U.S., durable goods topped estimates which bodes well for the economic recovery. Durable goods rose +1.7% in September which was the largest increase in six months and topped the +0.4% estimate. In other news, mortgage applications rose last week and recovered some of the losses from the previous week as demand for purchases and refinancing rose.
Thursday & Friday’s Action: Risk Assets Surge on EU Deal!
Stocks soared on Thursday after private lenders agreed to a 50% haircut on their Greek debt and EU leaders agreed to leverage the hell out of their EU bailout plan. French President Nicolas Sarkozy said the EFSF (European bailout fund) will be leveraged 4-to-5 times in an attempt to curb their excessive debt woes. Sarkozy also spoke with Chinese leader Hu Jintao who offered to help Europe from imploding. Economic data in the U.S. was positive, the Labor Department said weekly jobless claims came in at 402,000 which barely beat expectations. More importantly, GDP jumped +2.5% last quarter which matched estimates and bodes well for the economic recovery. Stocks were relatively quiet on Friday after consumer spending rose but incomes remained lackluster.
Market Outlook- Confirmed Rally:
The major U.S. averages are back in a new confirmed rally and broke above the mid-point/resistance of their 6-week bullish double bottom base. The benchmark S&P 500 index scored a proper FTD on Tuesday, October 18, 2011, i.e. Day 12, when it rallied over 2% on heavier volume than the prior session. 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.
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Market Outlook- Confirmed Rally:
The major U.S. averages are back in a new confirmed rally and broke above the mid-point/resistance of their 6-week bullish double bottom base. The benchmark S&P 500 index scored a proper FTD on Tuesday, October 18, 2011, i.e. Day 12, when it rallied over 2% on heavier volume than the prior session. 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.
Visit:
FindLeadingStocks.com
Market Outlook- Confirmed Rally:
The major U.S. averages are back in a new confirmed rally and broke above the mid-point/resistance of their 6-week bullish double bottom base. The benchmark S&P 500 index scored a proper FTD on Tuesday, October 18, 2011, i.e. Day 12, when it rallied over 2% on heavier volume than the prior session. The next important area of resistance is its longer term 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.
Visit:
FindLeadingStocks.com