Daily Market Commentary

Stocks End Mixed Ahead Of Fed Meeting

Monday, March 15, 2010
Market Commentary:

The major averages ended mixed as concern spread that China and India may begin seeking measures to curb their robust economies as inflation picks up. Compared to the prior session, volume fell on the NYSE and Nasdaq exchange. Decliners led advancers by a 11-to-8 ratio on the NYSE and by a 16-to-11 ratio on the Nasdaq exchange. There were 43 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, down from the 58 issues that appeared on the prior session. New 52-week highs again overwhelmingly trumped new lows on both exchanges.

US Dollar Up; Stocks & Commodities Mixed:

The US dollar rallied which put pressure on dollar denominated assets; mainly, stocks and commodities. Two important economic reports were released on Monday: industrial production and the Empire State manufacturing index. US industrial production unexpectedly grew +0.1% last month while manufacturing in the New York region rose for an eigth consecutive month.

Fed Meeting: To Raise, or not to Raise; that is the Question:

On Tuesday, the Federal Reserve is slated to announce its latest decision on interest rates and give its opinion on the state of the US economy. Analysts believe that the Fed will hold rates steady and largely reiterate its comments from its last meeting about the state of the economy. Inflation in Asia jumped to a 16-month high last month which led many analysts to believe that the Chinese and Indian Central banks will begin raising rates in the near future to curb their economy and combat inflation.

Market Action- Confirmed Rally:

Looking at the market, since the March 1, follow-through-day (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.
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