Daily Market Commentary

Stocks Fall On Weak Earnings Outlook

Charity Auction!

The Market Technicians Association Charity Foundation
Take An Analyst To Lunch: Adam Sarhan

Monday, October 4, 2010
Stock Market Commentary:

Stocks ended lower on Monday as the US dollar rallied and the latest round of economic data was released. Volume totals were reported lower on the NYSE and on the Nasdaq exchange compared to Friday’s session which signaled that large institutions were not aggressively selling stocks. Decliners trumped advancers by nearly a 3-to-1 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 19 high-ranked companies from the CANSLIM.net Leaders List made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, down from the 84 issues that appeared on the prior session.

Stocks Fall On Weak Earnings Outlook:

US capital goods orders and pending home sales rose in August while earnings forecasts were lowered on many large cap companies. Pending home sales rose for a second straight month which suggests the housing market may be stabilizing after a lousy second quarter. Many leading stocks got smacked on Monday as they pulled back towards important areas of support. The benchmark S&P 500 continued trading between its recent trading range of 1130-1150. One should expect this sideways action to continue until either of these important levels are breached on a closing basis.

Market Action- Confirmed Rally:

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.

Want Better Results?
Our Private Advisory Services Can Help You!

Sarhan Consulting provides both global macro and equity only consulting services to institutional clients around the world. For years, its clientele has participated in the firm’s objective market-based outlook, which has one primary goal: to provide stable trading ideas across all asset classes. 
Sarhan Capital’s consulting arm allows clients to participate in the idea generation process and be privy to many of Sarhan’s best ideas long before they are highlighted in other publications. In addition, clients receive objective feedback on their own ideas and are alerted each time Sarhan Capital traders buy and sell. Many institutional clients including hedge funds, private family offices, brokerages, registered investment advisers, and corporations, have turned to Sarhan Capital for personalized advisory/consulting services in recent years.

How We Can Help You:

  1. We employ a discretionary long/short global macro strategy that is profitable in both bull and bear markets.
  2. Achieve better results in the market by working with an objective third party who is not an internal “yes” man.
  3. Provide you with sound buy/sell ideas in real-time
  4. Provide objective feedback on your investment ideas and market outlook
  5. Contribute profitable ideas to your investment committee 
  6. All investment ideas are fully transparent, unbiased, and based on market action, not someone’s opinion.
  7. Help create uniformed structure within your organization!

 Contact Us Today To See How We Can Help You!