Daily Market Commentary

Stocks End Mixed As US Dollar Rallies

Monday, November 15, 2010
Stock Market Commentary:

Stocks and commodities ended mixed as the USD advanced against the euro. Volume patterns remain relatively healthy as the major averages have now entered their 12th 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.

EU Debt Woes Continue To Weigh On Markets:

The “big” story that continues to weigh on the market is the ongoing geopolitical woes in Europe. Over the weekend, both the IMF and Irish government said Ireland does not need additional aid to stay solvent. In Italy, four top officials in Italian Prime Minister Silvio Berlusconi’s government, including a Cabinet minister, will resign today in a move designed to trigger early elections and topple oust the current regime. In the U.S., retail sales topped estimates in October, thanks in part to stronger auto sales. The news helped lift stocks and offset concern from a softer than expected mfg report from the NY region.

Market Action- Confirmed Rally, Week 12:

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 October highs (SPX 1185-1190), then their respective 50-day moving average (DMA) lines. Trade accordingly.