Monday, July 19, 2010 Stock Market Commentary The major averages ended higher on Monday after getting smacked on Friday. As expected, volume was reported lower than Friday’s session on both exchanges due to options expirations. There were only 7 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net…
Friday, July 16, 2010 Stock Market Commentary: Friday’s plunge negated the week’s gains as investors digested a slew of economic and earnings data. As expected, volume was reported higher than Thursday’s session on both exchanges due to options expirations. There were only 4 high-ranked companies from theCANSLIM.net Leaders List that made a new 52-week high and appeared…
Looking forward, the window remains open for disciplined investors to carefully buy high-ranked stocks. Since the current rally began on July 1, the major averages have rallied on suspiciously light volume but has improved in recent sessions. It is ideal to see volume expand as the major averages break above resistance and see a new batch of high ranked leaders trigger fresh technical buy signals. These latest improvements are helping to confirm this nascent rally and provide a reassurance that odds are more favorable for successful investing using the fact-based system.
Looking forward, the window remains open for disciplined investors to carefully buy high-ranked stocks. Since the current rally began on July 1, the major averages have rallied on suspiciously light volume for the most part. It is ideal to see volume expand as the major averages break above resistance and see a new batch of high ranked leaders trigger fresh technical buy signals. These latest improvements are helping to confirm this nascent rally and provide a reassurance that odds are more favorable for successful investing using the fact-based system.
Tuesday, July 13, 2010 Stock Market Commentary: The major averages rallied for a sixth consecutive day after Alcoa (AA) and CSX (CSX) officially kicked off earnings season and the government said the trade deficit topped $1 trillion. Volume, a critical component of institutional sponsorship, was higher on the Nasdaq and the NYSE. There were 23 high-ranked companies from the…
Looking forward, the window is now open for disciplined investors to begin carefully buying high-ranked stocks again. Looking forward, the 200 DMA line should now act as near term support as this market continues advancing, while any reversal would be a worrisome sign. It is important to note that the NYSE composite, benchmark S&P 500 index, and the Dow Jones Industrial Average have now all seen their 50 DMA lines undercut their respective 200 DMA lines which is is known as a “death cross” and has bearish ramifications. In addition, remember to remain very selective because all of the major averages are still trading below their downward sloping 50 and 200 DMA lines and a fresh downward trendline (shown above). It was somewhat disconcerting to see volume remain light (below average) behind the confirming gains. It is important to note that approximately 75% of FTDs 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.
Looking forward, the window is now open for disciplined investors to begin carefully buying high-ranked stocks again. Looking forward, the 200 DMA line should now act as near term support as this market continues advancing, while any reversal would be a worrisome sign. It is important to note that the NYSE composite, benchmark S&P 500 index, and the Dow Jones Industrial Average have now all seen their 50 DMA lines undercut their respective 200 DMA lines which is is known as a “death cross” and has bearish ramifications. In addition, remember to remain very selective because all of the major averages are still trading below their downward sloping 50 and 200 DMA lines and a fresh downward trendline (shown above). It was somewhat disconcerting to see volume remain light (below average) behind the confirming gains. It is important to note that approximately 75% of FTDs 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.
Looking forward, the window is now open for disciplined investors to begin carefully buying high-ranked stocks again. The major indices’ 200-day moving average (DMA) lines may act as near term resistance. Remember to remain very selective because all of the major averages are still trading below their downward sloping 50 and 200 DMA lines. It was also somewhat disconcerting to see volume remain light (below average) behind the confirming gains. It is important to note that approximately 75% of FTDs 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.
Wednesday, July 7, 2010 Market Commentary: Stocks scored a follow-through day (FTD) on the fourth day of their latest rally attempt as volume, a critical component of institutional sponsorship, topped Tuesday’s levels. Advancers trumped decliners by over a 5-to-1 ratio on the NYSE and over a 3-to-1 ratio on the Nasdaq exchange. However, there were only 7 high-ranked…
The market remains in a correction, which emphasizes the importance of raising cash and adopting a strong defensive stance until a new follow-through day emerges. For the past several weeks, this column has steadily noted the importance of remaining very selective and disciplined because all of the major averages are still trading below their downward sloping 50-day moving average (DMA) lines. In addition, their 50 DMA lines may continue to act as stubborn resistance. It was also recently noted that the NYSE Composite and the benchmark S&P 500’s 50 DMA lines sliced below their respective 200 DMA lines, an event known by market technicians as a “death cross” which usually has bearish implications. Trade accordingly.