Stocks & Commodities End Mixed As Dollar Rallies

Monday, November 8, 2010
Stock Market Commentary:

Stocks and commodities ended mixed as the US dollar continued its three day advance. one day after the Federal Reserve announced a second round of quantitative easing. Volume patterns remain healthy as the major averages are now in their 10th week of their ongoing rally.On average, market internals remain healthy evidenced by an upward sloping Advance/Decline line and the fact that new 52-week highs continue to easily outnumber new 52-week lows on both exchanges.

Dollar and Gold Rally While Stocks and  Oil End Mixed:

The USD rallied for a third consecutive day. Normally, stocks and commodities fall when the US dollar rallies and the converse is also true. However, gold and several leading stocks rallied which suggests the bulls are still in control. The major averages ended near their highs which is also a net positive. The euro fell against the greenback largely due to Irish debt concerns. So far, the current rally remains intact with several sectors continuing to lead.

Market Action- Confirmed Rally, Week 11:

Heretofore, the action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been strong but the market action has been wide-and-loose which is not a healthy sign. 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.

Are You Looking For Someone To Manage Your Money?
Our Private Wealth Management Services Can Help You!

Sarhan Wealth Management provides both global macro and equity only consulting services to high net worth and institutional clients around the world. For years, our clientele has participated in the firm’s objective market-based outlook, which has one primary goal: to provide robust trading ideas across all asset classes. Since 2004 we have outperformed the S&P 500 on a regular basis. These results are based solely on our weekly research. All our historical data is available upon request.
How we can improve your performance:

  • Achieve better results in the market by working with an objective third party.
  • Provide you with sound buy/sell ideas in real-time.
  • Provide objective feedback on your investment ideas and market outlook.
  • Contribute profitable ideas to your investment committee (if applicable).
  • All investment ideas are fully transparent, unbiased, and based on market action, not opinions.
  • Help create uniformed structure within your organization.

Contact Us To Learn How We Can Help You!

Similar Posts

  • Worst Thanksgiving Week Since The Great Depression!

    Friday, November 25, 2011 Stock Market Commentary: Risk assets fell during the shortened holiday week as the situation in Europe continues to deteriorate and the latest economic data suggests the global economy may be slowing. This was the worst Thanksgiving week for stocks since 1932! For the week, the standout loser was the small-cap Russell 2000…

  • Happy Birthday Bull Market!

    Market Action- Rally Under Pressure; Week 28
    It was encouraging to see the bulls show up and defend the major averages’ respective 50 DMA lines in November, January, late February, and early March. 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. If you are looking for specific high ranked ideas, please contact us for more information.
    Have You Seen Our New Site?

  • Quiet Day On Wall Street

    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. That said, the window is now open for a new FTD to emerge which will confirm the current rally attempt. 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!

  • Holding Pattern Continues As Market Awaits New Year

    Before Thursday’s open, the Labor Department said weekly jobless claims fell to the lowest level since July 2008 which was a healthy sign for the ailing jobs market. Last week, jobless claims fell by -34,000 to 388,000, lower than the median forecast of 415,000 according to Bloomberg News. After the open, the Chicago PMI topped estimates and rose to 68.6 which bodes well for the ongoing economic recovery. At 10 AM EST, the National Association of Realtors (NAR) said their pending home sales index topped estimates and rose +3.5% to 92.2 from a downwardly revised 89.1 in October. Pending home sales indicate pending contracts that have yet to be closed. The market barely budged on the news which reiterates our thesis that the major averages are in a tight holding pattern until 2011. However, the recent 4-month rally in the major averages suggests the economy will continue to improve in the first half of 2011 and, barring some unforeseen event, the risk of a double dip recession is temporarily off the table. Normally, the stock market serves as a leading indicator and a great discounting mechanism for the economy.

Leave a Reply

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