Quiet Day On Wall Street

Byinfo@50park.com
RUT- Inverse Head and Shoulders Pattern
RUT- Inverse Head and Shoulders Pattern

Wednesday, March 21, 2012
Stock Market Commentary:

Stocks and other risk assets were bid up late Tuesday after Bernanke said he would take additional steps if another shock hit the global economy. As we have been mentioning for weeks, the market is extended to the upside and we would not be surprised to see a nice pullback to shake out the weak/late hands. 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. Since then, stocks have been enjoying a very strong uptrend. The benchmark S&P 500 paused near its 2011 high (~1370) before moving higher. At this point, it would be perfectly normal and healthy to see a 5-9% pullback at any point to give the bulls a chance to consolidate the recent gain. That would bring the S&P 500 down to 1320-1280. It is important to note that the bulls remain in control of this market as long as the benchmark S&P 500 stays above its 50 DMA line.

Bernanke Testifies & Economic Data Mixed:

Futures were higher on Wednesday after Ben Bernanke said that he would take additional steps to stimulate the economy if conditions worsened. The Mortgage Bankers Association said weekly mortgage applications fell last week due to a drop in refinancing demand. The National Association of Realtors said home sales slid -0.9% in February to a seasonally adjusted annual rate of 4.59 million and revised January’s reading to 4.63 million. That was the highest level since May 2010.  Equally important, housing stocks continue to act well.

Market Outlook- Confirmed Rally

Risk assets have begun pulling back which at this point is considered normal. The key going forward is to gauge the health of the pullback and see if the bulls are able to defend logical areas of support (recent chart lows and important moving averages). So far this action is considered healthy for the risk on trade. However, if sellers show up and support is breached then the bears will have regained control of this market (still a long ways off). As always, keep your losses small and never argue with the tape. 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!
 

Similar Posts

  • Day 1 Of New Rally Attempt; Stocks Positively Reverse!

    Byinfo@50park.com

    Market Outlook- In A Correction:
    The major U.S. averages are back in a “correction” as they continue to flirt and in some cases hit fresh 2011 lows. Allow us to be clear: If all the major averages break below their 2011 lows, then we will likely see another leg down. Please, trade accordingly! Several high ranked leaders violated their respective 50 DMA lines in late September which bodes poorly for the bulls and suggests the bears are getting stronger. The latest follow-through day (FTD) which began on August 23, 2011 has officially ended which means we will begin “counting” days before a new rally can be confirmed. In addition, it is important to note that the bears remain in control of this market until the major averages trade above their longer and shorter term moving averages (50 & 200 DMA lines). 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.
    Save Over 50%!
    Limited-Time Offer!
    www.FindLeadingStocks.com
    Coming Up This Week:
    WEDNESDAY: Weekly mortgage apps, Challenger job-cut report, ADP employment report, IS non-mfg index, oil inventories; Earnings from Costco, Monsanto, Marriott
    THURSDAY: BoE announcement, ECB announcement, jobless claims, chain-store sales; Earnings from Constellation Brands
    FRIDAY: Non-farm payroll, wholesale trade, consumer credit, Sprint’s 4G plans unveiled
    Source: CNBC.com

  • Stocks Tank On Tepid Jobs Report; Euro Plunges To A New Multi-Year Low!

    Byinfo@50park.com

    The author of “How To Make Money In Stocks”, the book that explains the fact-based investment system, has observed in the past that a market should not be considered to be in “healthy” shape unless at least 2 of the 3 major averages are trading above their rising 200-day moving average (DMA) lines. Only the Nasdaq Composite Index is currently above its long-term average, meanwhile the S&P 500 and Dow are encountering resistance. It would be very encouraging to see a proper follow-through-day (FTD) emerge for the benchmark S&P 500 and the Dow Jones Industrial Average to offer additional confirmation of a hearty new rally. Yet, acknowledging that we have a new confirmed rally based on the latest market improvements, the window is now considered to be open again to begin buying high-ranked stocks that trigger new technical buy signals but caution is sometimes the better part of valor.

  • Market In A Correction: Stocks Continue To Slide

    Byinfo@50park.com

    Tuesday, April 10, 2012 Stock Market Commentary: Stocks and other risk assets fell on Tuesday after equity markets in Europe plunged in heavy volume and the world awaits Q1 earnings season to begin. After Tuesday’s close, Alcoa (AA) officially kicked off earnings season and as always, it will be interesting to see how companies did…