Thursday, October 7, 2010
Stock Market Commentary:

Stocks spent most of the session in the red after the latest read on the jobs market fell short of estimates and the US dollar edged higher. Volume totals were reported lighter on the NYSE and on the Nasdaq exchange compared to Wednesday’s session which signaled that large institutions were not aggressively buying or selling stocks. Decliners led advancers by a modest ratio on the NYSE and on the Nasdaq exchange, while new 52-week highs easily outnumbered new 52-week lows on both exchanges. There were 47 high-ranked companies from the CANSLIM.net Leaders List made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, lower from the 58 issues that appeared on the prior session.

Central Bank Action & Latest Economic Data:

Overnight, the European Central Bank and the Bank of England kept interest rates steady, near record lows for the 17th consecutive month which matched expectations. Before Thursday’s opening bell, the Labor Department said weekly jobless claims slid by -11,000 to 445,000. Elsewhere, same store chain sales rose which helped allay slowing economic woes. Investors are now waiting for Friday’s non farm payrolls report for a better read on the fragile jobs market.

Market Action: Confirmed Rally

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 respective 200-day moving average (DMA) lines while the next level of resistance is their respective April highs. Trade accordingly.