Debt Deadline; To Be, Or Not To Be?

Byinfo@50park.com

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

  • Day 1 Of A New Rally Attempt

    Byinfo@50park.com

    Looking at the market, Wednesday marked Day 1 of a new rally attempt which means that as long as Wednesday’s lows are not breached, the earliest a possible follow-through day could emerge will be this Monday. However, if Wednesday’s lows are taken out, then the day count will be reset and the chances for a steeper correction increase markedly. It is also important to see how the major averages react to their respective 50 DMA lines. Until they all close above that important level the technical damage remaining on the charts is a concern. So far, the market’s reaction has been tepid at best to the latest round of economic and earnings data. Remember that the recent series of distribution days coupled with the deleterious action in the major averages suggests large institutions are aggressively selling stocks. Disciplined investors will now wait for a new follow-through day to be produced before resuming any buying efforts. Until then, patience is key.

  • Stocks Negatively Reverse At 50 DMA Line

    Byinfo@50park.com

    The technical action in the major averages continues to weaken. Currently, resistance for the the major averages are their 50 DMA lines, then their longer term 200 DMA lines. It is also disconcerting to see the action in several leading stocks remain questionable as evidenced by the dearth of high-ranked leaders breaking out of sound bases. Monday’s negatively reversal emphasizes the importance of remaining cautious until the rally is back in a confirmed uptrend. 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 Rally As EU Debt Woes Ease

    Byinfo@50park.com

    Looking forward, the window is now open for disciplined investors to begin carefully buying high-ranked stocks again. It was encouraging to see a flurry of high-ranked leaders trigger fresh technical buy signals and break out of sound bases in recent sessions. The next important level to watch for the major averages are their respective 200-day moving average (DMA) lines. 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.

  • Stocks Inch Higher As Fed Holds Rates Steady

    Byinfo@50park.com

    Wednesday, April 28, 2010 Stock Market Commentary: The major averages ended higher after the Federal Reserve held rates steady near historic lows and Spain’s debt was downgraded. Volume totals on Wednesday were reported lower compared to Tuesday’s totals which suggested large institutions were not aggressively buying stocks. Advancers led decliners by a 11-to-8 ratio on the NYSE and by a 14-to-13 ratio…

  • Happy Birthday Bull Market!

    Byinfo@50park.com

    Market Action- Rally Under Pressure; Week 28
    It was encouraging to see the bulls show up and defend the major averages’ respective 50 DMA lines in November, January, late February, and early March. From our point of view, the market remains in rally-mode 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. If you are looking for specific high ranked ideas, please contact us for more information.
    Have You Seen Our New Site?