Daily Market Commentary

Stocks Rally After Shrugging Off Greek Woes

Thursday, April 22, 2010
Market Commentary:

The major averages shook off earlier weakness and turned positive after President Obama outlined his plan to over hall the financial system. Greek concerns swelled. Volume, an important indicator of institutional sponsorship, rose compared to Wednesday’s totals. Advancers led decliners by a 23-to-14 ratio on the NYSE and by a 17-to-10 ratio on the Nasdaq exchange. New 52-week highs still easily trumped new lows on both exchanges. There were 70 high-ranked companies from the CANSLIM.net Leaders List that made a new 52-week high and appeared on the CANSLIM.net BreakOuts Page, higher than the 54 issues that appeared on the prior session. A healthy crop of new leaders making new highs bodes well for any market rally, but that number abruptly contracted amid the latest bout of distribution.

Europe’s Debt Continues To Explode!

The European Union said that Greece’s deficit was a stunning +13.6% of gross domestic product in 2009 which topped analysts estimates for a +12.9% reading. In addition, Ireland surpassed Greece as the EU nation with the largest deficit. It’s deficit was revised up to +14.3%. Initially, this sent stocks plunging as investors were concerned that the EU and the IMF will have to bailout more nations. However, their fears were allayed after President Obama gave a speech in lower Manhattan which outlined his plan to over hall the financial system.

Earnings, Earnings, & Earnings!

News was mixed on the earnings front, shares of Ebay Inc (EBAY -5.74%), Qualcomm Inc. (QCOM -7.74%), Nokia (NOK -13.11%) and Credit Suisse Group (CS -4.06%) all gapped down after reporting lackluster results. Meanwhile, shares of fast food chain Chipotle Mexican Grill (CMG +14.18%) and Isilon Systems (ISLN +22.77%) surged after reporting stellar results.
After Thursday’s close, shares of Amazon.com Inc. (AMZN –2.50%) and Microsoft Corp. (MSFT +0.19%) traded lower in afterhours trading after reporting their latest quarterly results while shares of American Express (AXP X+1.70%) jumped after their latest quarterly report was released.

Market Action- Confirmed Uptrend:

Remember, it is important to note that the major averages have been steadily rallying since early February and a pullback of some sort should be expected. However, the fact that we have yet to see a modest pullback bodes very well for the bulls. Trade accordingly.
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