Stocks Edge Higher On Solid Economic Data

Thursday, December 16, 2010
Stock Market Commentary:

The major US averages continued trading in a relatively tight range as a flurry of headlines crossed the wires. Market internals remain healthy, evidenced by an advancing advance/decline line and an expanding number of stocks reaching new 52-week highs. However, volume patterns are not ideal which weighs on this market.

Spain’s Bond Auction & US Economic Data:

Spain’s bonds slid, sending the 10-year yield up four basis points to 5.56%, after the country sold 2.4 billion euros of 10-year and 15-year bonds at an auction on Thursday. The Bank of Spain said that the results were just below a maximum target of 3 billion euros. In the US, the Labor Department said jobless claims unexpectedly fell by -3,000 to 420,000 last week. Elsewhere, the Commerce Department said, housing starts swelled to a 555,000 annual rate last month which was 3.9% higher than October’s level. Finally, the Federal Reserve Bank of Philadelphia’s general economic index rose to 24.3 which topped the median forecast of 15, as orders and the factory workweek rose.

Market Action- Market In Confirmed Rally Week 16

It is encouraging to see the bulls show up and defend the 50 DMA lines for the major averages. The market remains in a confirmed rally 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. Put simply, stocks are strong. Trade accordingly. 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!

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

  • Week-In-Review: Stocks End Mixed As Earnings And Tariffs Dominate The Headlines

    Special Offer: Do You Know The Cheapest Stocks On Wall Street? Our Members Do. Take Your 1-Month Free Trial Now Stocks Ended Mixed As Earnings And Tariffs Take Center Stage Stocks ended mixed to mostly higher last week as the Russell 2000, Dow Jones Industrial Average and the benchmark S&P 500 ended flat to slightly higher…

  • M&A News Helps Stocks; China's Money Supply & Lending Shrinks

    Market Outlook- Market In A Correction:
    From our point of view, the market is back in a correction now that all the major averages closed below their respective 50 DMA lines and important upward trendlines. Since the beginning of May, we have urged our clients and readers to be extremely cautious as the major averages and a host of commodities began selling off.
    For those of you that are interested, the S&P 500 hit a new 2011 high on May 2, 2011. Two days later, on Wednesday, May 4, 2011, we turned cautious and said “The Rally Was Under Pressure” (read here). Then on Monday, 5.23.11, we changed our outlook to “Market In A Correction” (read here). On Monday June 6, 2011 we pointed out that the S&P 500 violated its 9-month upward trendline (read here) and reiterated our cautious stance. We have received a lot of “thank you” emails for being “spot on” in our cautious approach. We are humbled by your presence and very thankful for your continued support. Looking forward, the next level of resistance for the major averages is their respective 50 DMA lines then their 2011 highs. The next level of support is their longer term 200 DMA lines. 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!

  • Stocks Rally On Elections, QE II & Strong Jobs Data

    Friday, November 5, 2010 Stock Market Commentary: Stocks and commodities soared as the US dollar fell 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…

  • Week In Review: Leaders Get Hit As Market Churns

    Initially, the market rallied on the jobs report but sellers quickly emerged which put pressure on the market. It was disconcerting to see a several high profile leaders such as Apple Inc. (AAPL -1.61%) and Netflix (NFLX -3.04%) get smacked on Friday. Apple, one the strongest stocks since the March lows, triggered a technical sell signal when it violated its well defined 8-month upward trendline and its 50 DMA line on Friday. This was the first time since the March low that Apple closed below support (its upward trendline and 50 DMA line). Volume surged as the stocks fell which indicated that large institutional investors were unloading their positions, not Aunt Mary or Uncle Bob. The dollar rallied sharply after the jobs report was released which put pressure on a slew of commodities, mainly gold. Gold plunged sharply today which dragged a slew of gold related stocks. Remember that gold has been one of the strongest performing groups in recent weeks and now that it has fallen, a new group will need to emerge to carry this market higher. That coupled with the recent questionable action in the major averages and the dearth of leadership suggests this rally is “under pressure” which means caution is advised.

  • Stocks Fall Amid Fresh EU Debt Woes

    Looking forward, the window is now open for disciplined investors to begin carefully buying high-ranked stocks again. It was encouraging to see a flurry of high-ranked leaders trigger fresh technical buy signals and break out of sound bases in recent sessions. The next important level to watch for the major averages are their respective 200-day moving average (DMA) lines. It is 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.

Leave a Reply

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