Fed Speaks; World Listens

Byinfo@50park.com

Wednesday, June 22, 2011
Stock Market Commentary:

Stocks and a slew of commodities opened higher in anticipation of positive comments from the Federal Reserve on Wednesday. From our point of view, the Nasdaq composite and small-cap Russell 2000 indexes both produced sound follow-through days (FTD) which confirmed their latest rally attempts on Tuesday. This healthy action suggests the bulls are now back in control of this market; as long as the 200 DMA line holds. It is important to note that every major rally in history began with a FTD but not every FTD leads to a major rally.

Home Prices Edge Higher, FOMC Meeting, & Bernanke Press Conference:

Before Wednesday’s open, the Federal Housing Finance Agency (FHFA) House Price Index (HPI) was released which showed a slight uptick in home prices. The index unexpectedly rose in April, snapping a six-month losing streak. The FHFA house price index rose +0.8% in April, following a decline of -0.4% in March. The Federal Reserve held rates steady which matched expectations and largely reiterated their recent stance on the U.S. economy and inflation.

Market Outlook- Confirmed Rally:

The market produced a sound follow-through day (FTD) on Tuesday, June 21, 2011 which confirmed the latest rally attempt. Looking forward, this rally will remain intact as long as the major averages continue trading above their respective 200 DMA lines and their recent chart lows. It was encouraging to see the bulls show up and defend the longer term 200 DMA line in the middle of June which is the latest level of support. The next level of resistance for the major averages is their respective 50 DMA lines. Trade accordingly.
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. On June 21, 2011 we changed our Market Outlook to a “Confirmed Rally” after the latest FTD was produced. 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

  • 2nd Half Of 2011 Begins!

    Byinfo@50park.com

    Market Outlook- Market In A Correction:
    The market is back in a correction after another failed follow-through day on Tuesday, June 21, 2011. Now that we are back in a correction, defense remains the best offense. The next level of support for the major averages is their respective 200 DMA lines and then their March lows. The next level of resistance for the major averages is their respective 50 DMA lines. Trade accordingly.
    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. On June 21, 2011 we changed our Market Outlook to a “Confirmed Rally” after the latest FTD was produced. Two days later, on Thursday, June 23, 2011, our outlook changed to “Market In A Correction”after the market sold off hard on renewed economic woes. 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!

  • Week In Review: Stocks Snap A 7-Week Win Streak

    Byinfo@50park.com

    Stocks Snap A 7-Week Win Streak Stocks snapped a very strong 7-week win streak after overseas jitters coupled with imploding oil prices hurt confidence. Over the past month, we have written extensively about how this market was getting “extended/over-bought” and way overdue for a pullback of some sort. That is exactly what is happening right now….

  • Head & Shoulders Top Or Double Bottom?

    Byinfo@50park.com

    It is also important to note that the major averages are currently tracing out either a massive head-and-shoulders top or a potential double bottom pattern. There are two possible scenarios from this point: the market will trade above the middle of the “W” (dotted line shown above) or it will take out the neckline of its H&S top (recent lows, not shown). Only time will tell which pattern prevails. Patience is paramount until either pattern resolves itself. Trade accordingly.

  • FedEx & Healthy Housing Data Lift Stocks

    Byinfo@50park.com

    It was encouraging to see the major averages continue rallying after breaking above their their respective 2-month downward trendlines and their respective 50-day moving average (DMA) lines on Friday. At this point, the window remains open for for high ranked stocks to be accumulated when they trigger fresh technical buy signals. If you are interested in learning more, feel free to contact us for a full list of high ranked candidates. Trade accordingly

  • New! Strong Week & Month On Wall Street!

    Byinfo@50park.com

    Market Outlook- Market In A Confirmed Rally
    From our point of view, the market is back in “rally-mode” as all the major averages continue to trade above their respective 50 DMA lines and are flirting with, or at, fresh 2011 highs! In addition, leading stocks have held up very well even as the major averages slid below their respective 50 DMA lines in mid-April which is another encouraging sign. If you are looking for specific help navigating this market, please contact us for more information.
    Want Better Results?
    You Need Better Ideas!
    We Know Markets!
    Learn How We Can Help You!