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

  • Tight Trading Range Continues

    Byinfo@50park.com

    So far, the action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been very strong and stocks are simply pausing to consolidate their recent gains. It was encouraging to see the bulls show up and defend support (formerly resistance) in recent weeks. The next level of support for the major averages is their September highs, then their respective 200-day moving average (DMA) lines while the next level of resistance is their respective April highs. Trade accordingly

  • Day 1 Of A New Rally Attempt

    Byinfo@50park.com

    Stocks took a heavy beating on Thursday, sending all the major averages below their respective 200 DMA lines on heavy volume. Stocks ended higher on Friday after the S&P 500, Russell 2000 and Nasdaq Composite all shook out below their May 6, 2010 (flash crash) low. For the week, all the major averages suffered tremendous losses and fell over -10% from their late April highs, which is the first time a pullback of that magnitude has occurred since the March 2009 low. The fact that the market rallied on Friday technically marked Day 1 of a new rally attempt which means the earliest a proper follow-through day (FTD) could occur would be Wednesday, providing Friday’s lows are not breached. However, if at anytime, Friday’s lows are breached, then the day count will be reset. What does all of this mean for investors? Simple, the market remains in a correction which reiterates the importance of adopting a strong defense stance until a new rally is confirmed. Trade accordingly.

  • Day Count Reset; Market In A Correction 2.4.10

    Byinfo@50park.com

    Looking at the market, Thursday’s ominous action took out Monday’s lows and effectively ended the brief rally attempt which suggests a steeper correction may unfold and resets the day count for a proper follow-through day to emerge. It is also important to see how the major averages react to their respective 50-day moving average (DMA) lines which were support and are now resistance. 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 paramount.

  • Stocks End Near Lows; After Strong Open

    Byinfo@50park.com

    The market remains in a correction, which emphasizes the importance of raising cash and adopting a strong defensive stance until a new follow-through day emerges. For the past several weeks, this column has steadily noted the importance of remaining very selective and disciplined because all of the major averages are still trading below their downward sloping 50-day moving average (DMA) lines. In addition, their 50 DMA lines may continue to act as stubborn resistance. It was also recently noted that the NYSE Composite and the benchmark S&P 500’s 50 DMA lines sliced below their respective 200 DMA lines, an event known by market technicians as a “death cross” which usually has bearish implications. Trade accordingly.

  • Debt Woes Smack The Euro

    Byinfo@50park.com

    Market Outlook- Uptrend Under Pressure:
    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 current rally is under pressure as investors patiently await earnings season and continue to digest the latest economic data. Until 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!