Quiet Day On Wall Street

Byinfo@50park.com
Russell 2k Breaks Out Of An Inverse Head and Shoulds Pattern
Russell 2k Breaks Out Of An Inverse Head and Shoulds Pattern

Tuesday, March 27, 2012
Stock Market Commentary:

Stocks and other risk assets were mixed on Tuesday after the latest round of mixed economic data was released. 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 and that level should now become support. The next level of support would be the 50 DMA line, then a deeper 5-9% pullback. 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.

Economic Data Mixed:

Stocks ended lower on Tuesday as investors digested the latest round of mixed economic data. The S&P Case/Shiller index was unchanged which beat the -0.2% decline the Street had expected. The report showed that prices for single-family homes were unchanged in January which bodes well for the ongoing recovery in the housing market. On a non-seasonally adjusted basis, prices fell by -0.8%. A separate report showed that consumer confidence in the U.S. fell in March to 70.2, from an upwardly revised 71.6 in February. This just missed the Street’s 70.3 expectation.

Market Outlook- Confirmed Rally

After a brief pullback most risk assets (mainly stocks and a slew of commodities) are back in “rally-mode” evidenced by the strong rally we have seen in recent days. This shallow pullback is considered healthy and shows how strong the bulls are at this point. However, if sellers show up and support is breached then the bears will have regained control of this market. 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!
Coming Up This Week:
TUESDAY: S&P Case-Shiller home price index, consumer confidence, 2-yr note auction, Fed’s Rosengren speaks; Earnings from Lennar, Walgreen
WEDNESDAY: Weekly mortgage apps, durable goods orders, oil inventories, 5-yr note auction, Fed’s Bullard speaks, FDA discusses obesity drugs
THURSDAY: GDP, jobless claims, corporate profits, Fed’s Plosser speaks, 7-yr note auction, farm prices, Fed’s Lacker speaks; Earnings from Best Buy, Research In Motion
FRIDAY: Personal income & outlays, Chicago PMI, consumer sentiment, Stringer’s last day as Sony CEO
Source: CNBC.com
 

Similar Posts

  • Stocks Slide As Global Recovery Slows

    Byinfo@50park.com

    The technical action in the major averages has deteriorated significantly. Not all of the major averages managed to rally above their recent chart highs, and all have now sliced back below their respective 200-day moving average (DMA) lines. It is also worrisome to see the number of distribution days pile up in recent weeks which puts pressure on the current five-week rally. Whenever a market rally becomes under pressure (as it is now), it is usually wise to err on the side of caution and adopt a strong defensive stance until the bulls regain control. Trade accordingly.

  • Bulls Celebrate March '09 Bottom

    Byinfo@50park.com

    Since last the March 1, FTD the market and a batch of leading stocks steadily rallied. The fact that we have not seen any serious distribution days since the FTD bodes well for this nascent rally. It is also a welcome sign to see the market continue to improve as investors digest the latest round of stronger than expected economic and earnings data. Remember that now that a new rally has been confirmed, the window is open to start buying high quality breakouts. Trade accordingly.

  • US Stocks Negatively Reverse After China's Currency Becomes More "Flexible"

    Byinfo@50park.com

    It is also important to note that it was encouraging to also see the Dow Jones Industrial Average and the benchmark S&P 500 Index rally above their respective 200-day moving average (DMA) lines last week. The 200 DMA line should now act as support as this market continues advancing, while any reversal below that key technical level would be a worrisome sign.
    Remember to remain very selective because all of the major averages are still trading below their downward sloping 50 DMA lines (which is the next area of resistance). It is also 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.

  • 27-Week Rally Continues!

    Byinfo@50park.com

    Market Action- Rally Under Pressure; Week 27 Begins
    It was encouraging to see the bulls show up and defend the major averages’ respective 50 DMA lines in November, January, and late February. 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. However, it is important to note that stocks were a bit extended in recent months and this pullback (back to the 50 DMA lines) is very healthy as it shakes out the weaker hands and restores the the health of this bull market. If you are looking for specific high ranked ideas, please contact us for more information.
    Are You Looking For Someone To Manage Your Money?
    Our Private Wealth Management Services Can Help You!