Investors Digest More Earnings & Economic Data

Gold Continues Forming A Bullish Double Bottom Pattern
Gold Continues Forming A Bullish Double Bottom Pattern

Thursday, January 26, 2012
Stock Market Commentary:

Stocks and a slew of other risk assets opened higher after the U.S. Federal Reserve made it clear that they are going to keep rates near zero until 2014. 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 is doing its best to stay above its Q4 2011’s high (~1292) and now has its sights set on its 2011 highs 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.

Easy Money, Earnings & Economic Data Helps Stocks:

On Thursday, stocks and a slew of risk assets opened higher but were quiet in the wake of the Federal Reserve’s latest meeting. The Fed made it clear that they are going to hold rates steady near zero until 2014 to help the global economy recover. The latest economic and earnings data was mixed to slightly positive which also helped stocks. Durable goods rose 3% which easily topped the Street’s estimate for a 2% gain. Meanwhile, the Labor Department said weekly jobless claims rose by 21,000 to 377,000 which topped the Street’s estimate for a gain of 370,000. Leading economic indicators rose to a 5-month high which bodes well for the economy. However, new home sales unexpectedly fell -2.2% to a seasonally adjusted annual rate of 307,000, which was the first decline in 4 months and lower than the Street’s estimate.
THURSDAY: Durable goods orders, jobless claims, new home sales, leading indicators, 7-yr note auction; Earnings from AT&T, Caterpillar, 3M, Nokia, AutoNation, Bristol-Myers, Time Warner Cable, Motorola Mobility, Starbucks
FRIDAY: GDP, consumer sentiment; Earnings from Chevron, P&G, DRHorton
Source CNBC.com:

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!
 

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