Stocks Close Higher On Healthy Earnings Data

Tuesday, April 20,2010
Market Commentary:

The major averages ended higher on Tuesday after Goldman Sachs (GS -2.05%) said Q1 earnings almost doubled and reaffirmed that it did not mislead investors in the SEC case. Volume, an important indicator of institutional sponsorship, slid compared to Monday’s totals. Advancers led decliners by over a 4-to-1 ratio on the Nasdaq exchange and by a 3-to-1 ratio on the NYSE. New 52-week highs still easily trumped new lows on both exchanges. There were only 37 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the 16 issues that appeared on the prior session. A healthy crop of new leaders making new highs bodes well for any market rally, but that number abruptly contracted amid the latest bout of distribution.

Earnings, Earnings, & More Earnings!

Before Tuesday’s opening bell, investment giant, Goldman Sachs said Q1 earnings rose +61% compared to the first quarter in 2009 as sales surged +21%. Net income, which excludes all misc expenses almost doubled in the first quarter which bodes well for the financial industry. However, the stock encountered resistance near its 50 & 200 DMA lines and closed lower as investors are still concerned about the ongoing SEC investigation.
After Tuesday’s close, three prominent tech stocks released their latest quarterly results: Apple Inc. (AAPL -1.00%), Yahoo! Inc. (YHOO -0.05%), and Cree Inc. (CREE +2.62%) all reported solid quarterly results. All three stocks reported very strong results and blew away analysts estimates so it will be interesting to see how they close tomorrow.  

Market Action- Confirmed Uptrend:

Remember, it is important to note that the major averages have been steadily rallying since early February and a pullback of some sort should be expected. The prior commentary’s observation, “Since the March 1, 2010 follow-though-day (FTD) a handful of distribution days has not been the least bit damaging to the market’s confirmed rally” – was immediately followed with the 6th distribution day for the S&P 500 Index, a sign of mounting pressure on this 8-week rally. However, the fact that we have yet to see a modest pullback bodes very well for the bullish case. Trade accordingly.
Professional Money Management Services- Free Portfolio Review:
Our skilled team of portfolio managers knows how to follow the rules of this fact-based investment system. If your portfolio is greater than $100,000 and you would like a free portfolio review, 
Click Here to get connected with one of our portfolio managers. ** Serious inquires only, please.

Similar Posts

  • Stocks Drift Lower On Last Day Of Q3

    The action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been very strong. Looking forward, the window is open for disciplined investors to carefully buy high-ranked stocks, while many pundits are expecting that markets may consolidate following recent gains. It was encouraging to see the bulls show up and defend support (formerly resistance) last week. The next level of support for the major averages is their respective 200-day moving average (DMA) lines while the next level of resistance is their respective April highs. Trade accordingly.

  • Stocks Rally As Nuclear Threat Eases In Japan

    Market Action- Market In A Correction; 28-Week Rally Ends
    All the major averages sliced below their respective 50 DMA lines on Thursday, March 10, 2011. Thursday, March 17, 2011 marked day 1 of a new rally attempt which means that the earliest a possible follow-through day (FTD) could emerge would be Tuesday, as long as Thursday’s lows are not breached. However, if Thursday’s lows are breached, then the day count will be reset and odds will favor lower prices, not higher, will follow. It is important to note that the recent ominous action reiterates the importance of raising cash and playing strong defense until a new FTD emerges. If you are looking for specific help navigating this market, please contact us for more information.
    Don’t Miss Out!
    Have You Seen How Our New Site Can Help You!
    Visit: www.SarhanCapital.com Today!

  • Stocks End Q1 Higher But Last Day Lower

    The benchmark S&P 500 index currently has 4 distribution days while the Nasdaq composite and Dow Jones Industrial Average have 3, since the March 1, 2010 follow-though-day (FTD). Normally, it is considered healthy for the major averages to have less than 4 distribution days in a four week period. 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 proactively be buying high quality breakouts meeting the investment system guidelines. Trade accordingly.

  • Week-In-Review: Stocks End Week Flat As Earnings Continue

    Stocks End Week Flat As Earnings Continue It was another volatile week on Wall Street. Stocks ended flat as investors digested a slew of earnings reports and the bulls showed up and defended the longer term 200 DMA line. The major indices opened the week with a big selloff and then the bulls showed up…

  • Week-In-Review: Stocks Rally As Earnings Take Center Stage

    Special Offer: Do You Know The Cheapest Stocks On Wall Street? Our Members Do. Take Your 1-Month Free Trial Now Stocks Rally As Earnings Take Center Stage Stocks ended mixed to mostly higher last week as the Dow Jones Industrial Average, the benchmark S&P 500 and the tech-heavy Nasdaq composite rallied, while the small-cap Russell…

  • Day 3 Of A New Rally Attempt

    Looking at the market, Wednesday marked Day 3 of a new rally attempt which means that as long as Monday’s lows are not breached, the earliest a possible follow-through day could emerge will be Thursday. However, if Monday’s lows are taken out, then the day count will be reset and the chances for a steeper correction increase markedly. It is also important to see how the major averages react to their respective 50-day moving average (DMA) lines. 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 key.

Leave a Reply

Your email address will not be published. Required fields are marked *