Stocks Look Past Lousy Confidence Data

Tuesday, September 28, 2010
Stock Market Commentary:

The major averages ended higher as investors looked past the latest round of lackluster economic data. Volume totals were reported higher on the NYSE and on the Nasdaq exchange compared to Monday’s session which signaled large institutions were aggressively buying stocks. Advancers led decliners by over a 2-to-1 ratio on the NYSE and on the Nasdaq exchange. New 52-week highs easily outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange. There were 70 high-ranked companies from the CANSLIM.net Leaders List made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the 68 issues that appeared on the prior session.

Stocks  Look Past Lousy Confidence Data:

Stocks spent the first half of the session trading in the red as investors digested the latest round of mixed economic data. At 9:00AM EST, the S&P Case-Shiller housing price index (HPI) was released which showed a modest uptick in home prices around the country. The news was good, not great. One hour later, stocks fell after consumer confidence plunged below estimates. The Conference Board’s consumer confidence index slid to 48.5, which was down from last month’s reading of 53.2. Despite the negative data, it was encouraging to see the benchmark S&P 500 index fall to a 1132 before the bulls showed up and defended support. Longstanding readers of this column know that 1131 was resistance for most of the summer and has now become near term support.

Market Commentary- Confirmed Rally:

The action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been strong. Looking forward, the window is open for disciplined investors to carefully buy high-ranked stocks, while many pundits are expecting that markets may consolidate following recent gains. It was encouraging to see the bulls show up and defend support (formerly resistance) again today. 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!

Similar Posts

  • Stocks End Mixed As Volume Recedes

    The stock market ended mixed on Monday after trading in a very tight range for most of the session. Volume, an important indicator of institutional sponsorship, was lower than Friday’s levels on both major exchanges which suggested large institutions were not aggressively selling stocks. Advancers led decliners by about a 10-to-9 ratio on the NYSE and were roughly even on the Nasdaq exchange. There were 29 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, less than the total of 45 issues that appeared on the prior session. Leadership among high-ranked growth stocks had dried up in recent weeks, so the expansion in new highs this week has been a welcome improvement. New 52-week highs solidly outnumbered new 52-week lows on the NYSE and on the Nasdaq exchange.

  • Stocks Wait For E.U. Meeting

    Market Outlook- Confirmed Rally:
    The major U.S. averages are back in a new confirmed rally and are flirting with resistance of their current 2.5 month base. The benchmark S&P 500 index scored a proper FTD on Tuesday, October 18, 2011, i.e. Day 12, when it rallied over 2% on heavier volume than the prior session. The next important area of resistance is September’s highs and then the 200 DMA line. In addition, it is important to note that the bulls scored a victory since many of the major averages closed above their downward sloping 50 DMA lines for the first time since late July! Our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. If you are looking for specific help navigating this market, please contact us for more information.
    Fall Sale- We Will Double Your Order!!!
    Limited-Time Offer!
    www.FindLeadingStocks.com

  • Stocks Tank On Contagion Woes

    Over the past two weeks, this column has consistently mentioned that the major averages have been steadily rallying since early February and a pullback of some sort should be expected. Furthermore, we mentioned that the current rally was under pressure due to the disturbing number of distribution days that emerged in recent weeks. So, we hope that Tuesday’s sell off (and any further downside action in the near term) should not take any of you by surprise. Trade accordingly.

  • Stocks Edge Higher After Retesting 200 DMA Line

    The major averages confirmed their latest rally attempt on Tuesday, June 15, 2010 when they produced a sound follow-through day. Looking forward, the window is now open for disciplined investors to begin carefully buying high-ranked stocks again. Technically, it was encouraging to also see the Dow Jones Industrial Average and the benchmark S&P 500 Index rally above their respective 200-day moving average (DMA) lines. Looking forward, the 200 DMA line should now act as support as this market continues advancing, while any reversal would be a worrisome sign. Remember to remain very selective because all of the major averages are still trading below their downward sloping 50 DMA lines. It was somewhat disconcerting to see volume remain light (below average) behind the confirming gains. 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.

  • Another Volatile Session On Wall St As Investors Digest Awful Housing Data & Latest Fed Meeting

    Technically, the fact that both the Dow Jones Industrial Average and the S&P 500 Index closed below their respective 200-day moving average (DMA) lines suggests the market may retest its recent lows. Looking forward, the 50 DMA line should now act as resistance and this month’s lows should act as support. Since the June 15, 2010 follow-through day (FTD), this column has steadily noted the importance of remaining very selective and disciplined because all of the major averages are still trading below their downward sloping 50-day moving average (DMA) lines. This week’s sell off simply confirms that view. Trade accordingly

  • Debt, Debt, & More Debt!

    Market Outlook- Uptrend Under Pressure:
    The last week of June’s strong action suggests the market is back in a confirmed rally. As our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. That said, the current rally is under pressure as investors patiently await earnings season. Until then, the market deserves the bullish benefit of the doubt. 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!

Leave a Reply

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